A Comparative Analysis Between Sukuk and Conventional Bonds. In Terms of Risk-Return Characteristics

      Аннотация: The instruments are an important way to finance in the Islamic financial system. It also prohibits usury (interest) in Islam and conventional bonds are not suitable for investors in the Islamic countries. Since its launch in the 1980s, and gained instruments recognition and popularity as an alternative to conventional bonds. The aim of this study is to analyze the similarities and differences between traditional instruments and bonds in terms of risk and return characteristics. This study employs a comparative analysis of traditional instruments and bonds. Data were collected on traditional instruments and bonds from eight countries, including Malaysia, Saudi Arabia (KSA), United Arab Emirates (UAE), Bahrain, Qatar, Pakistan, Turkey and Kuwait. The main results showed that the inclusion of instruments in the portfolios of conventional bonds to reduce the risk of a mixed portfolio appears. This is important to note that if this works in the long term, and instruments can provide an opportunity to diversify the much needed international investors in fixed-income securities.

Ключевые слова: ISLAMIC FINANCE, OLS Regression, Value-at-Risk, Islamic bonds, Sukuk, conventional bonds, risk and return