Table 2 The differences between ṣukūk... | Emerald Publishing

Table 2

The differences between ṣukūk and bond

	Ṣukūk	Bonds
Ownership	Partial ownership of an asset	Debt obligation
Compliance	The assets that back ṣukūk should be compliant with Sharīʿah	Compliance with laws of country/locality they are issued in
Pricing	The face value of a ṣukūk is priced according to the value of the assets backing them	Bond pricing is based on credit rating, i.e. the issuer’s credit worthiness
Rewards and risks	Ṣukūk holder receives a share of profit from the underlying asset. Ṣukūk holder accepts a share of any loss incurred	Returns from the bonds correspond to fixed interest (making them riba) Their principal is guaranteed to be returned at the bond’s maturity sate
Effect of costs	Ṣukūk holders are affected by costs related to the underlying assets Hight costs and translate to investor profits and vice versa	Bond holders generally are not affected by costs related to the assets, project, business or joint venture they support. The performance of the underlying asset does not affect investor rewards
Sales	Sale of ownership in the assets backing them	Sale of Debt

	Ṣukūk	Bonds
Ownership	Partial ownership of an asset	Debt obligation
Compliance	The assets that back ṣukūk should be compliant with Sharīʿah	Compliance with laws of country/locality they are issued in
Pricing	The face value of a ṣukūk is priced according to the value of the assets backing them	Bond pricing is based on credit rating, i.e. the issuer’s credit worthiness
Rewards and risks	Ṣukūk holder receives a share of profit from the underlying asset.Ṣukūk holder accepts a share of any loss incurred	Returns from the bonds correspond to fixed interest (making them riba)Their principal is guaranteed to be returned at the bond’s maturity sate
Effect of costs	Ṣukūk holders are affected by costs related to the underlying assetsHight costs and translate to investor profits and vice versa	Bond holders generally are not affected by costs related to the assets, project, business or joint venture they support. The performance of the underlying asset does not affect investor rewards
Sales	Sale of ownership in the assets backing them	Sale of Debt

Source(s): Bond+Ṣukūk Information Exchange (bix) (2019)