Final presentation in Iqra University Islamabad Campus.

1. Hassan Ahmed Khan
24432
Farrukh Abbasi
24482

2. Introduction
What is Sukuk?
• Word Sukuk is derived from Arabic word “Sakk”
meaning certificate.
• The design of sukuk is very similar to the process
of securitization of asset in conventional
markets where a wide range of asset types of
securitized.
• This asset types include mortgages, auto loans,
accounts receivables, credit card payoffs etc.

3. Issuance Procedure

4. Categories of Sukuk
• Istisna’a Sukuk
• Salam Sukuk
• Mudarabah Sukuk
• Musharkah Sukuk
• Ijarah Sukuk
• Sukuk Al Murabaha

5. Sukuk In Pakistan
• Concept of Sukuk is not very popular in
Pakistan.
• A lot of work should be done in this field, But
few examples are:-
1. WAPDA Sukuk for upraising Mangla Dam
2. Motorway Sukuk

6. Cont’
• Sukuk market in Pakistan has grown more than
ten fold during the period 2006-11.
• The slowdown in domestic sukuk market in 2008,
was a consequence of global financial turmoil.
• The sukuk instruments issued to date are
concentrated in the short to medium-term tenor
ranging between 3-7 years. Ijarah is the most
commonly used sukuk structure in Pakistan
followed by Diminishing Musharaka and
Musharaka.

7. Cont’
• Pakistan’s Islamic banking assets witnessed a
compounded annualised growth (CAGR) of 28
per cent during the past five years; presently
accounting for a market share of 7.3 per cent.

8. WAPDA Sukuk
• WAPDA’s financing requirement: PKR 8,000
million to (partially) fund the Mangla Dam Raising
Project
• Why WAPDA?
1. Strengthen its presence in the local financial
markets
2. Undertake a landmark transaction which will
catalyze the promotion of Islamic Financial
instruments and lead the way for other public
sector entities

10. Conclusion
• Sukuk market offers strong potential for raising
funds required for infrastructure development.
• To develop a vibrant sukuk market the country
needs to address challenges :-
1. Dearth of short-term and long-term instruments.
2. absence of secondary market for mitigating
liquidity risk.
3. identification of assets for sovereign sukuk and
disclosure of actual financing purpose.

11. Recommendations
• The government should consider establishing
an institution on the lines MIFC to provide
impetus to the sukuk market.
• Real progress towards the advancement of
sukuk market requires concerted efforts from
all stake holders including regulators,
corporate sector, Islamic financial institutions
and asset management companies.