THE GLOBAL UNVERSITY IN ISLAMIC FINANCE (INCEIF)
Kuala Lumpur, Malaysia
SUKUK PRICING STRATEGIES: RISK
ASSESSMENT vs. SHARI’AH STANDARDS
A Dissertation Proposal submitted in partial fulfillment of the
requirement of the Doctorate of Philosophy in Islamic Finance
BY
NIDAL A. ALSAYYED
(0900313)
January 2010
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
Reviewed and approved by,
……………………………………………
Dr. Ahcene Lahsasna
Graduate Studies Academic Advisor
Shari’ah and Legal Studies Department
……………………………………………..
Prof. Datuk Syed O. AlHabshi
Chief Academic Officer & Dean
Professor of Islamic Economics, Banking, and Takaful
2|Page
2009
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
‫بسم هللا الرحمن الرحيم‬
In the name of Allah, The most Merciful,
TABLE OF CONTENTS
ABSTRACT (English & Arabic)
Approval Page
Declaration Page
Acknowledgement
List of Tables
List of Figures
List of Abbreviation
CHAPTER ONE: INTRODUCTION
1.0 Introduction
1.1 Sukuk overview in Malaysia and Middle East
1.3 Historical background
1.4 Objectives of the study
1.4.1 Motivation of the study
1.4.2 Contribution of the study
1.4.3 Organization of Chapters
3|Page
2009
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
CHAPTER TWO: LITERATURE REVIEWS
2.0 Introduction
2.1 Basic Principles of Islamic Financial Systems
2.2 The concept of Debt & Equity in Islam
2.3 The development of sukuk in Malaysia and Middle East
2.3.1 Murabahah - based Sukuk
2.3.2 Ijarah- based sukuk
2.3.3 Mudarabah – based sukuk
2.3.4 Salam & Istisna Sukuk
2.4 The structure of Islamic Bonds (Malaysia vs. Middle East)
2.4.1 Sale-based Financing Debt Instrument
2.4.2 Lease-based Financing equity-Equity Debt instruments
2.5 Sukuk and Islamic Bonds vs. Conventional Bonds
2.6 Unresolved Issues on Malaysian and Middle East Sukuk
2.7 Conclusion
CHAPTER THREE: SUKUK PRICING ENGINEERING MODELS
3.0 Introduction
3.1 Evolution and Profiles of Sukuk Structures and Markets
3.2 Innovative Mathematical Approach and
3.3 Conclusion
CHAPTER FOUR: THEORITICAL FRAMEWORK AND HYPOTHESIS
DEVELOPMENT
4.0 Introduction
4.1 Theoretical Framework
4.1.1 Legitimacy Theory
4.1.2 Social Issue Life Cycle Theory
4.1.3 Hypothesis Development
4.1.4 Islamic Financial Reporting Associations (IFSB vs. AAOIFI)
4|Page
2009
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
2009
4.2 Conclusion
CHAPTER FIVE: RESEARCH METHODOLOGY
5.1 Introduction 5.2 Data Collection
5.2.1 Contents Analysis
5.2.2 Disclosure Index 5.2.3 Questionnaire (Mail Survey)
5.3 Sample Selection 5.4 Conclusion
CHAPTER SIX: FINDING AND ANLYSIS
6.1 Introduction
CHAPTER SEVEN: CONCLUSION
7.1 Introduction 7.2 Conclusion for Research Results and Findings 7.3 Limitation
of the Study 7.4 Research Outlook
BIBLIOGRAPHY
APPENDIX: Sample Questionnaire
5|Page
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
2009
ABSTRACT
The purpose of this dissertation is to provide an empirical analysis of different corporate
& sovereign sukuk (Islamic Bonds) structures from a financial and economical
perspective. This examination includes murabahah, mudarabah, and Ijarah -based sukuk,
while the former offering a fixed return, and the latter, the most popular form of sukuk,
and a variable return. The potential for other more novel sukuk structures based on
Musharakah partnership contracts is also investigated, and sukuk pricing issues are
explored using alternative benchmarks to London Inter-bank Offer Rate (LIBOR).
I aim to conduct a hybrid contemporary research project utilizing Islamic Financial
Engineering tools to modern sukuk structures; outside the conventional law of mu’amalat
and under the guidance of the Qur’an and Sunnah. The project seeks to expand the
knowledge, clear misconceptions, provide guidance, help decision makers standardize
shari’ah parameters and practices in the issuance of sukuk, and bridge the relevant gap in
Islamic capital market, instruments, pricing policies, strategies, and risk transfer- among
scholars, jurists, practitioners, and financial institutions in the Middle East and Malaysia.
The central feature of this research is to offer a different interpretation and design models
of the source material of the Shari’ah towards a vital, important, and viable economic
sukuk pricing & structures in today’s Islamic Finance.
6|Page
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
2009
KEY WORDS: Islamic Financial Price Engineering, Musharakah- based sukuk, Ijarahbased sukuk, Malaysia, Middle East, Conventional Law of Mu’amalat (The shari’ah
perspective on commercial transactions), AAOIFI1, IFSB2, Ijtihad, and Alternative
Benchmarks to LIBOR, and Benchmarking
INTRODUCTION AND LITERATURE REVIEW
The unprecedented advances in information technology & communications and the
diverted approach to Intensive Knowledge Economics had left its fingerprints on the
financing instruments and methodologies for governments, financial institutions and
corporations; which had depended on the imitative (traditional- “taqlidi”) banking and
finance approach for a very long time. In today’s market which was accompanied with
not only the evolvement of multinational corporations3, mutual funds, treasury stocks,
Credit Cards, CDs; Financial markets, commodity markets, and precious metals markets;
but also with the newly developed tools, instruments, and formulas of multi-applied
transactions conducted in those markets.
The most important of those instruments penetrated the Islamic financial markets are
sukuk; which continue to remain the topic that researchers can never keep up with its
diversified and multi facet aspect. In spite of the fact; that many had referred to sukuk in
1
Accounting and Auditing Organization for Islamic Financial Institutions
The Islamic Financial Services Board (IFSB)
3
I am not referring only to those corporations with Foreign Direct Investment; but also to those “DAC”
corporations (based in USA, Japan, UK, France, and German).
2
7|Page
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
2009
the context of conventional bonds, debt securities, non shari’ah compliant sukuk4,
innovations in sukuk structure will continue to be the motive force in real expansion of
the Islamic Financial Industry.
To bring new and significantly different products to the market; will require the
introduction of a new production technique, the opening up of new market5 The industry
products have become commodities and increasingly both less profitable and more
expensive to sell. Islamic Financial services industry will have to reinvent itself if it is to
continue to prosper in the 21st century.
Innovative sukuk structures pricing strategies are new models; which needed to be
formulated In light of the operative procedure of Islamic Capital markets.6 Sukuk design
and pricing structures are conducted by trained professionals in a highly centralized and
controlled market. In addition the contract specifications and its related procedures are
such that the prospects of uncertainty and risk-taking (gharar) are virtually eliminated.
Adequate understanding of the mechanisms of sukuk pricing and profiles and the relevant
market procedures since only then will be able to determine the nature of the issues
before us in each case and specify the purpose of our inquiry and its hypotheses7.
The commercial reality of the market can be judged from an Islamic law view point
without negatively influencing the public interest and under the spirit of shari’ah The
4
Sheik Taqi Usmani declared early in the first quarter of 2008 that bulk of the sukuk issued in the market
defied Islamic norms (Usmani, M. Taqi: An Introduction to Islamic Finance, Idaratul Ma’arif, Karachi,
Pakistan).
5
Peter Drucker(1999), Economist, Drucker on Financial Services, Innovate or die
6
Ali Abd Al-Qadir (2006), Encyclopedia of Islamic Banks
7
Mohammad H. Kamali (2002), Islamic Commercial Law: An analysis of futures and Options
8|Page
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
2009
shari’ah provides us with the necessary tools (maslahah being one of them) to reach an
acceptable formula for both practitioners and in line with the public interest.
STATEMENT OF THE RESEARCH PROBLEM
Islamic finance as an emerging form of financial intermediation would require
tremendous investment in research and development to promote innovation. Of
importance is to develop a broader range of Islamic financial market instruments
that include instruments with equity ownership features, Islamic asset-backed
securities, inclusion of permissible forms of credit enhancements as well as
Shari’ah-compliant risk mitigating instruments. The development of an Islamic
Bonds (Sukuk) market for hedging is required for market-making activities to
support the development of secondary markets. Malaysia has recently established
a Shari’ah Scholar’s fund to fund such research and development efforts. The
fund also aims to promote greater engagement among the international Shari’ah
scholars and thus provide a platform for deliberation on the Shari’ah compatibility
of newly developed Islamic financial instruments and markets.
The increasing complexity in the way that debt is created and distributed in the
financial system raises important implications for financial stability. The
“originate and distribute” strategy that has been adopted by some institutions
warrants addressing more comprehensively the full range of risks to which the
banks are exposed. This includes the liquidity, equity, foreign exchange, profit,
and moral hazard risks in banking institutions. Credit risk exposures have also
9|Page
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
2009
taken on more complicated forms, including counterparty risks on derivatives and
foreign exchange transactions. The valuation of such financial transactions and
instruments are also often difficult to measure particularly under distressed market
conditions. In addition, the correlations between credit and market risk, both
within and across national borders, have become more complex. Of concern has
also been lack of adequate information on debt concentrations in the system partly
due to the increasingly elaborate ways in which debt is passed on from originating
institutions to different investors. The propensity to under price credit risk,
especially under conditions of excess liquidity, has also increased concerns over
underwriting standards. The consequent sharp pricing corrections would in turn
have the potential to result in broader economic disruptions.
We cannot simply accept the argument of some contemporary scholars referring
to high percentage of sukuk applications as they closely resemble conventional
debt instruments without scrutinizing and investigating this matter in all relevant
aspects. Sukuk can be structured and applied to contribute a major role in the
expansion and development of the economic structure of any country.
Moreover; we cannot neglect the massive total notional value, the huge use of
leverage involved with multiple sukuk structures and that early indications of the
investment portfolio structural problem show up quicker in the sukuk markets.
10 | P a g e
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
2009
RESEARCH QUESTIONS
1. What is the pricing strategy which best suit the most commonly issued sukuk
structures (Middle East and Malaysia)? How risk can be assessed and valued?
2. What are the Shari’ah parameters (standards) that have to be adhered to each
sukuk structure and its applicability and challenges?
3. What are the associated sukuk hedging (risk mitigating) tools that are currently
employed and in the Islamic banking industry? How Shari’ah compliant?
Challenges.
JUSTIFICATION OF THE STUDY
I aim to illustrate the implication of key parameters in pricing today’s most popular sukuk
structures and assessing different types of risk associated with today’s volatile market.
Flow charts are used to illustrate different innovative structural models, pricing strategies,
financial transfers and the rights and obligations of sukuk investors as well as the
beneficiaries of the funding as indicated by Shari’ah standards of AAOFI & IFSB.
Historical data have been used to assess whether the payments flows are more stable in
the case of sovereign & corporate sukuk where the returns are based on gross domestic
product (GDP) growth rather than interest.
HYPOTHSIS OF THE RESARCH
The conventional debt instrument (Interest, usury, or Riba) and gharar in sukuk is
evidently a pervasive concept that permeates the whole spectrum of contracts and
11 | P a g e
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
2009
transactions in Islamic law. It is also a broad concept in that it comprises uncertainty and
risk-taking as well as excessive speculation, gambling and ignorance of the material
aspects of contracts. The basic tools of evaluation and analysis that Islamic law has
provided are comprehensive enough to relate to all these concerns and especially to the
overriding one, namely to ensure, fairness and prevent excessive uncertainty and abuse in
commercial transactions and contracts.
To determine the correct procedure for the resolution of ikhtilaf in Muslim societies
today, one should refer to the Constitutions and laws of the countries concerned.
Resolutions of difference s must be made in a maslahah oriented manner in the interests
of the people and by accommodating their views. Once a selection has been made by the
ruling authorities, everyone must comply with it and disagreements must be laid to rest.
Of course, there is no single formula for resolving ikhtilaf. Often the shari’ah, or the
applied law of a country, provide only genera l guidelines and leave specific decisions to
be made by the experts or those in charge of community affairs.
Islamic legal theory on financial transactions; that have similar aspects to the application
of financial derivatives , sources and principles, and how they were applied by different
schools and scholars to derive religious verdicts. I will – Insha’Allah- 'streamline'
Islamic law through a number of Sunni schools, various conceptions of shari'ah, and
modern attempts at law reform through dynamic scholarship and Ijtihad (independent
judgment). Upon completion we should be able to explain the developments process in
Islamic legal thought within our socio historical contexts, and identify key debates among
Muslim scholars using modern case studies.
12 | P a g e
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
2009
RESEARCH METHODOLOGY AND SOURCE OF DATA
A hybrid research method is used (60% quantitative and 40% qualitative) that will
employ many tools among of which a specially designed questionnaire (English &
Translated to Arabic in some cases) to collect data from major players (hundreds of
copies) in this industry (Malaysia and Middle East). Such questionnaire will consist of
multiple choice questions based on the hypothesis as well as a blank spaces to get the
practitioner open responses.
Moreover; the other methodology that will be used is case-study where triangulation of
the data is required to confirm results (Yin 2003). The following methods will be used for
collecting primary and secondary data:
Primary Data
Focus group discussions:

Practitioners

Practicing lawyers
Focus group discussions, with participants ranging from 7-10 per group. This is to ask
questions on the type of Islamic derivatives being used in their practice.
Practitioners from following banks/financial institutions:
-
KFH
-
Mabank Investments Bank
-
Bank Islam
-
CIMB Investment Bank
13 | P a g e
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
-
Deutsche Bank
-
Canyon
2009
Research Questions Answered:
4. What sukuk structures are currently being used in Islamic banking and finance?
5. What are these sukuk used for?
6. How are these sukuk used?
Online forums/discussion groups through internet:

IBF net,

linked-in.
Questions posed in these forums to find out on Islamic derivatives.
Research Questions Answered:
1. What sukuk structures are currently being used in Islamic banking and finance?
2. What are these sukuk used for?
3. How are these sukuk used?
Interviews:

face to face;

through the phone, and

email.
Interviews will be with Shari’ah advisors and scholars on the Shari’ah parameters.
Proposed Shari’ah Advisors/scholars:
14 | P a g e
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
2009
Sheikh Nizam Yaqubi
Dr. Ali Daghi
Research Question Answered:
1. What are the Shari’ah parameters that have to be adhered to and complied with to
enable them to be used in Islamic banking and finance?
Secondary Data
Documents from banks/financial institutions:

fact sheets;

brochures,

agreements, and

Others.
Documents with diagrams that explain the structure of these sukuk will also be used to
support the interviews and focus group discussions.
-
KFH
-
Mabank Investments Bank
-
Bank Islam
-
CIMB Investment Bank
-
Deutsche Bank
15 | P a g e
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
-
2009
Canyon
Research Questions Answered:
1. What sukuk structures are currently being used in Islamic banking and
finance?
2. What are these sukuk used for?
3. How are these sukuk used?
Online Databases/Archives:

Journals articles; Newspaper articles;
Research Questions Answered:
1. What are the associated sukuk hedging (risk mitigating) tools that are
currently being used in Islamic banking and finance?
2. What are these instruments used for?
3. How are these instruments used?
INCEIF digital Library, IIUM Library , UM, National Library, Online
Databases/Archives:


Fiqh Sources – Al-Qur’an
-
Sunnah/Hadeeths
-
Ijma – Ibn Mundhir
-
Qiyas – Usul- al-fiqh
Sources from the bibliography/references of Dr. & Dr.
16 | P a g e
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
2009
These sources of fiqh will support the interviews with the scholars, on the Shari’ah
parameters.
Research Question Answered:
1. What are the Shari’ah parameters that have to be adhered to and complied
with to enable them to be used in Islamic banking and finance?
POPULATION AND SAMPLE
While Fiqh, especially worship (Ibadat) type, prescriptions are permanent in nature and
for all individuals, economic and financial descriptions may change from time to time
and from society to another. This research argues that the methods of reasoning for
reaching an Ijtihad ruling in Islamic financial are not necessarily identical. While Fiqh
has a well developed methodology in the form of Usul al-fiqh, Islamic financial
engineering for innovative sukuk structures are in its search for finding whether it is
shari’ah permissible or not should rely on a methodology that suits its social and
descriptive nature.
RESEARCH INSTRUMENT (s)
Under Construction.
17 | P a g e
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
2009
ADMINISTRATION OF THE INSTRUMENT (s)
The instruments will be administered by the researcher, Shari’ah scholars, research
supervisors, as well as some research assistants. Methods of data interpretation includes
but not limited: -Regression, and multiple regression analysis of the data collected.
SCOPE OF THE STUDY
Little has been written previously on the use of Musharakah partnership contracts for
sukuk, and pricing issues have not hitherto been systematically investigated.
The study is expected to cover the period from 2000 to 2010 (for data analysis) and till
date for literacy review. Also the study will cover major Middle East countries (Saudi
Arabia, Bahrain, United Arab Emirates, Jordan, and Qatar) and Malaysia.
LIMITATION OF THE STUDY
The data analyses were restricted to four countries, but this could be extended.
Alternative pricing benchmarks were suggested for some famous sukuk structures.
In each of the foregoing it is clear that there are diverse opinions, enough dynamism and
latitude within the Shari’ah to reform and/or reinterpret the Fiqh rules to be better
reflective of modern transactions, circumstances, and cultural outlook. Where the
methodology and legal principles are not sufficient, the sanctity attached to contractual
obligations, including treaties in the Shari’ah; make it possible to reform conventional
mu’amalat law. At the same time there are some concepts such as usury, insurance, and
speculative contracts, which will be much more difficult, if not impossible, to overcome
if the conventional Shari’ah mu’amalat law are adhered to.
18 | P a g e
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
2009
THEORITICAL FRAME WORK
Under Construction
EXPECTED RESULTS, CONCLUSIONS AND OUTCOMES
Possible results will include the investigation to (but not limited to):
1. Investigate Special Purpose Vehicles as a prerequisite for the successful issuance
and management of sukuk. The use of GDP-based pricing benchmarks would
have resulted in greater payments stability for sovereign debt in Middle East, but
not for Malaysia.
2. Recommend that Ministries of Finance and Central Banks of Muslim countries
should review their debt financing policies and explore the potential of many
sukuk structures.
3. Provide and highlight an overview of the key regulatory institutions and industry
associations in Islamic Finance today and focus on areas that merit increased
attention.
4. The growth of Islamic Finance sector is impacted by increased involvement of
western regulators; as well as credit rating agencies; existing of sound accounting
procedures, and increased protection of stakeholders of Islamic Financial
Institutions.
5. Elaborate the experience of Malaysia in developing sukuk market and the methods
that have been
19 | P a g e
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
2009
BIBLIOGRAPHY8 (Sample out of 113 Articles & Books)
[1]
Abbas, A. (2005), “Helping to build an Islamic Capital Market”, Banker Middle
East, 1 October, pp. 15-17
[2]
Wilson, Rodney (2008), “Innovation in the Structuring of Islamic sukuk
Securities”, Humanomics, Vol. 24, No. 3, pp. 170-181. Emerald Group Publishing
Limited.
[3]
Aseambankers (2005), “Capitalizing on Opportunities in the Sukuk Industry”,
Aseambankers, Kuala Lumpur, pp. 1-5
[4]
Aquil, B. (2005), “Tracking the progress of Sukuk”, Islamic Banking and Finance
Magazine, 14 October, pp. 6-7.
[5]
Bahrain Monetary Agency (now Central Bank of Bahrain) (2002), Islamic
Banking and Finance in the Kingdom of Bahrain, Bahrain Monetary Agency,
Manama, pp. 72-75
[6]
Dommisse, A. and Kazi, W. (2005), “Securitization and Shari’ah Law”, Banker
Middle East, 1 July, pp. 7-8
[7]
Eastern Oracle (2005), “Malaysia’s PT Orient to issue Sukuk Musharakah for
Indonesian Port”, IFIS Islamic Finance Weekly, 3 October, p.2.
[8]
New Millennium Publishing (2005), “First Airline Sukuk Lead-Managed by
Dubai Islamic Bank”, IFIS Islamic Finance Weekly, 14 October, P.6
[9]
McNamara, P. (2005), “How to Sell Sukuk”, Banker Middle East, 1 August, pp.
4-5.
[10]
Alexakis, Christos (2009), “Islamic Finance: regulatory framework - Challenges
lying ahead”, International Journal of Islamic and Middle Eastern Finance and
Management”, Vol. 2 No. 2, pp. 90-104, Emerald Group Publishing Limited
[11]
Chapra, M.U., and Khan, T. (2000),” Regulation and Supervision of Islamic
Banks’, Occasional Paper No. 3, Islamic Development Bank/Islamic Research
and Training Institute, Jeddah.
[12]
Alvi, Ijlal (2008), “Capacity Building Needs for Issuing Sovereign Sukuk”,
Quarterly Newsletter, August, p.3, Dow Jones Islamic Market Indexes.
8
I have gathered all available relevant articles, papers, lectures, and book’s titles relevant to the subject
of my proposal.
20 | P a g e
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
TABLE OF CONTENTS
ABSTRACT (English & Arabic)
Approval Page
Declaration Page
Acknowledgement
List of Tables
List of Figures
List of Abbreviation
CHAPTER ONE: INTRODUCTION
1.0 Introduction
1.1 Sukuk overview in Malaysia and Middle East
1.3 Historical background
1.4 Objectives of the study
1.4.1 Motivation of the study
1.4.2 Contribution of the study
1.4.3 Organization of Chapters
21 | P a g e
2009
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
CHAPTER TWO: LITERATURE REVIEWS
2.0 Introduction
2.1 Basic Principles of Islamic Financial Systems
2.2 The concept of Debt & Equity in Islam
2.3 The development of sukuk in Malaysia and Middle East
2.3.1 Murabahah - based Sukuk
2.3.2 Ijarah- based sukuk
2.3.3 Mudarabah – based sukuk
2.3.4 Salam & Istisna Sukuk
2.4 The structure of Islamic Bonds (Malaysia vs. Middle East)
2.4.1 Sale-based Financing Debt Instrument
2.4.2 Lease-based Financing equity-Equity Debt instruments
2.5 Sukuk and Islamic Bonds vs. Conventional Bonds
2.6 Unresolved Issues on Malaysian and Middle East Sukuk
2.7 Conclusion
CHAPTER THREE: SUKUK PRICING ENGINEERING MODELS
3.0 Introduction
3.1 Evolution and Profiles of Sukuk Structures and Markets
3.2 Innovative Mathematical Approach and
3.3 Conclusion
22 | P a g e
2009
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
2009
CHAPTER FOUR: THEORITICAL FRAMEWORK AND HYPOTHESIS
DEVELOPMENT
4.0 Introduction
4.1 Theoretical Framework
4.1.1 Legitimacy Theory
4.1.2 Social Issue Life Cycle Theory
4.1.3 Hypothesis Development
4.1.4 Islamic Financial Reporting Associations (IFSB vs. AAOIFI)
4.1.4.1Quantity & Quality of Disclosure
4.1.4.1.1 Reputational Sensitivity of Industry
4.1.4.1.2 Ownership Status
4.1.4.1.3 Size of Enterprise
4.2 Conclusion
23 | P a g e
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
CHAPTER FIVE: RESEARCH METHODOLOGY
5.1 Introduction
5.2 Data Collection
5.2.1 Contents Analysis
5.2.2 Disclosure Index
5.2.3 Questionnaire (Mail Survey)
5.3 Sample Selection
5.4 Conclusion
CHAPTER SIX: FINDING AND ANLYSIS
6.1 Introduction
CHAPTER SEVEN: CONCLUSION
7.1 Introduction
7.2 Conclusion for Research Results and Findings
7.3 Limitation of the Study
7.4 Research Outlook
24 | P a g e
2009
SUKUK PRICING STRATEGIES: RISK ASSESSMENT vs. SHARI’AH
STANDARDS
BIBLIOGRAPHY
APPENDIX: Sample Questionnaire
25 | P a g e
2009