2006-08-11 14:49:41 · 3 answers · asked by professional student 4 in Business & Finance ➔ Investing
Islamic bonds are similar to conventional bonds in Malaysia. It always has fix term maturity, can bear a coupon, and trades on the normal yield price relationship. For conventional investors, the structuring of the bonds by the issuer is immaterial. The difference lies only in the way the issuer structure the bonds.
An Islamic bonds is structured such that the issuance is not an exchange of paper for money consideration with the imposition of an interest as per conventional. It is based on an exchange of approved asset for some financial consideration that allow the investors to earn profits from the transactions. Approval of the assets and the contract of exchange would be based on Sharia (Islamic law) principles , which is necessary to meet the Islamic requirement.
The various type of Islamic-based structures used for the creation of Islamic bonds are sale and purchase of an asset based on deferred payment, leasing of specific assets or participation in joint-venture businesses.
2006-08-11 14:58:46 · answer #1 · answered by Anonymous · 0⤊ 0⤋
They charge "fees" up front that you have to pay. that is what I heard in my international business class.
2006-08-11 21:55:59 · answer #2 · answered by nathanael_beal 4 · 0⤊ 0⤋
It is a way to pay interest without "paying interest" (usury...)
A religious sham.
2006-08-11 23:20:25 · answer #3 · answered by Anonymous · 0⤊ 0⤋