sukuk pakistan
TRANSCRIPT
Hassan Ahmed Khan24432
Farrukh Abbasi24482
Introduction What is Sukuk?• Word Sukuk is derived from Arabic word “Sakk”
meaning certificate.• The design of sukuk is very similar to the process
of securitization of asset in conventional markets where a wide range of asset types of securitized.
• This asset types include mortgages, auto loans, accounts receivables, credit card payoffs etc.
Issuance Procedure
Categories of Sukuk
• Istisna’a Sukuk• Salam Sukuk• Mudarabah Sukuk• Musharkah Sukuk• Ijarah Sukuk• Sukuk Al Murabaha
Sukuk In Pakistan
• Concept of Sukuk is not very popular in Pakistan.
• A lot of work should be done in this field, But few examples are:-
1. WAPDA Sukuk for upraising Mangla Dam2. Motorway Sukuk
Cont’• Sukuk market in Pakistan has grown more than
ten fold during the period 2006-11.• The slowdown in domestic sukuk market in 2008,
was a consequence of global financial turmoil. • The sukuk instruments issued to date are
concentrated in the short to medium-term tenor ranging between 3-7 years. Ijarah is the most commonly used sukuk structure in Pakistan followed by Diminishing Musharaka and Musharaka.
Cont’
• Pakistan’s Islamic banking assets witnessed a compounded annualised growth (CAGR) of 28 per cent during the past five years; presently accounting for a market share of 7.3 per cent.
WAPDA Sukuk
• WAPDA’s financing requirement: PKR 8,000 million to (partially) fund the Mangla Dam Raising Project
• Why WAPDA?1. Strengthen its presence in the local financial
markets
2. Undertake a landmark transaction which will catalyze the promotion of Islamic Financial instruments and lead the way for other public sector entities
Conclusion• Sukuk market offers strong potential for raising
funds required for infrastructure development.• To develop a vibrant sukuk market the country
needs to address challenges :-1. Dearth of short-term and long-term instruments.
2. absence of secondary market for mitigating liquidity risk.
3. identification of assets for sovereign sukuk and disclosure of actual financing purpose.
Recommendations
• The government should consider establishing an institution on the lines MIFC to provide impetus to the sukuk market.
• Real progress towards the advancement of sukuk market requires concerted efforts from all stake holders including regulators, corporate sector, Islamic financial institutions and asset management companies.