What are the most important determinants or obstacles which obstruct the issuance and expansion in this very important investment and financing tool?
The low issuance of corporate financing Sukuk deprives business organizations of an important financing source which could be used for the benefit of these organizations, as well as the national economy.
The research objectives include: The need to expand in issuance of Sukuk by business organizations, study the determinants and factors which influenced the issuance of corporate Sukuk, study the experience of countries which succeeded in issuance of Sukuk.
On the light of data collected from business organizations and investors through questionnaire directed to customers / investors and business organizations, and experts in the field of corporate and sovereign Sukuk, and after the analysis and test of hypothesis made the research concluded that There are general as well as specific determinants which affect the issuance of corporate Sukuk which include the following:
First: The lack of potential investors and business organizations’ awareness of corporate Sukuk as an important source of investment & funding affects the funding of business organizations through Sukuk, and costs investors negatively by losing potential returns.
Second: Most of investors and business organizations concerned with Sukuk were not aware of the law that regulates the issuance of Sukuk (1995 Sukuk law) which benefits and protects the rights of both parties, and hence the joint stock companies though the 1995 Sukuk law has stipulated that they are permitted to issue Sukuk have not made full benefit of 1995 Sukuk law in issuing Sukuk.
Third: The guarantee of such Sukuk by the business organizations is considered a factor that influences issuance of Sukuk.
Fourthly: The high rates of return of Shihama and government investment certificates (Sarh), is an important reason why investors are unwilling to invest in corporate Sukuk that yield lower returns and represent high risks than sovereign Sukuk.
Consequently, the following recommendations are reached:
First: The research recommends keeping individual investors aware of the merits and advantages of Corporate Sukuk as an efficient profitable investment tool, and further recommends that business organizations be kept aware of corporate Sukuk to be able to issue private Sukuk, considering that Sukuk benefits productive sectors as well as national economy.
Secondly: The research recommends keeping investors and business organizations aware of 1995 Sukuk law for the benefits of both parties and in turn benefit the national economy.
Thirdly: The research recommends providing necessary guarantees for Sukuk to attract investors’ investment in Sukuk.
Fourthly: The research recommends the revision of 1995 Sukuk law and make the due changes to keep up with new developments that benefit both Sukuk and the national economy.