Islamic capital markets: An ever-expanding frontier

Author: IFLR Correspondent | Published: 23 Sep 2019

By Rafiq Jaffer, head of debt capital markets, Al Tamimi

Islamic finance structures are based on the precepts of the shariah. Broadly speaking, the shariah is the body of Islamic jurisprudence that regulates various aspects of life including politics, economics, and succession. In the context of finance, the shariah prescribes certain prohibitions, which constitute the main principles of Islamic finance. These prohibitions relate to the charging of interest (riba), uncertainty (gharrar) in contracts, contracts relating to gambling (qimar) and contracts pertaining to unethical investments. In addition, Islamic finance transactions are required to have a linkage to an underlying tangible asset (commodities, vehicles, real estate etc.)

In other words, an Islamic finance transaction will typically involve the sale of an asset, the lease of an asset, or participation in a joint venture or partnership involved in an operating or new business venture.

Definition of sukuk and size of the sukuk market...