An exploratory study onMusharakahSRI Sukuk for the development ofWaqfproperties/assets in Malaysia

Nor Syahirah Zain and Zulkarnain Muhamad Sori

Qualitative Research in Financial Markets, 2020, vol. 12, issue 3, 301-314

Abstract: Purpose - This study aims to explore a sustainable and responsible investment (SRI) sukuk model based onMusharakahthat could be implemented to developwaqfproperties and assets under the SRI sukuk framework in Malaysia. This includes proposing and designing a potential SRI sukuk model and seeking the opinion of subject-matter experts and industry practitioners on the model, its attractiveness to investors and its feasibility to implement in Malaysia. Design/methodology/approach - The study adopts desk research and semi-structured interview as its methodology. A desk research is where a detailed critical review and analysis of past literature from reports, journals, framework, books and practices are undertaken. To establish a SRI sukuk model, the paper also studies the cases of the first SRI sukuk issued in Malaysia and otherwaqf-related sukuks that have been structured for the development ofwaqfproperty/asset in the past. Following that, the opinion of subject-matter experts and industry practitioners on the proposed SRI sukuk model is sought in a semi-structured interview. Findings - Based on the interviewees’ response, the study proposes the most feasible SRI sukuk model that could be implemented in the Malaysian context for the development ofwaqfproperties/assets, which is aMusharakah-based sukuk model. The model will be elaborated based on the purpose of development, functionality, choice ofShari’ahcontract, obligor and return mechanism. Research limitations/implications - This paper is exploratory in nature. While it explores the structural point of view only, future research could analyse and identify the legal, regulatory, financial andShari’ahaspects of the proposed model. Further empirical studies can be done to provide more comprehensive idea and knowledge regarding the subject matter. Practical implications - The study serves great benefit to the government,waqfadministrators, regulators, policymakers, foundations, corporations and interested investors to explore SRI sukuk as one of the feasible financial instruments to developwaqfin Malaysia. Originality/value - This study proposes the use of an innovative financial instrument called SRI sukuk and structures a feasible SRI sukuk model to help realise the true roles ofwaqfas not only a religious tool but also one of the instruments for human, economic and social developments.

Keywords: Corporate governance; Islamic finance; Endowment; Social responsible investment; SRI sukuk; Waqf properties/assets; Feasibility; Sukuk Musharakah (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eme:qrfmpp:qrfm-09-2018-0099

DOI: 10.1108/QRFM-09-2018-0099

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