Development of Sukuk in the Middle East - Research Paper Example

The paper "Development of Sukuk in the Middle East" is a perfect example of a finance and accounting research paper. Sukuk is considered similar to a bond in the case of Western Finance and it is regarded as an Islamic certificate. The structure of Sukuk mainly complies with the Islamic religious law, which is known as Sharia. Sukuk is considered a financial certificate of Arab. Sukuk is a certificate that is being sold to the investor by the issuer who returns it back to the issuer in lieu of a predetermined amount of fees.

The issuer of Sukuk enters into a contractual agreement or promises to buy back the bonds at a par value on a future date. The concept and the structure of Sukuk have been introduced and developed because the structure of payment of bond on the basis of the western method is not allowed or permissible in Arabian countries. Sukuk establishes a relationship between the return and the cash flow from the financing of the assets. The financing in the case of Sukuk is applicable only in the case of identifiable assets.

The structure of Sukuk is developed in such a way that it provides an adequate return to its investors without violating the rules and regulations of Islamic law. There are varieties and different types of structure of Sukuk that is associated with the underlying asset. The most well-known and familiar type of Sukuk is related to the partial ownership of the asset and it also includes the other types of bonds that are related or associated with the partial ownership of the debt, business, project or investment.

Sukuk can also be defined as the undivided shares that are related or associated with particular projects or special investment. The investor of Sukuk has a common share that is related to the investment in the ownership of the asset but it does not represent or deals with the debt that is owed to the issuer of the instrument.This research paper, will focus majorly on the Dow Jones Sukuk index which has diverse exposure to the global Islamic fixed-income security. The major focus will lie majorly on the development of the dividend of the shares are gradually growing with time.

Thus different research methods will be employed in attaining the main objectives of the research.