SUKUK

What are the key product risks? 

Credit risk

• The payment of the Principal Amount or returns (profits) of this Investment depends upon the ability of the Issuer to make such payments.

Interest rates risk

• The risk that an increase in interest rate may cause the bond price to decline in value.

Currency risk (for foreign currency sukuk)

• Foreign currency investments are subject to exchange rate fluctuations which may affect, unfavorably or favorably, the effective return on the sukuk. 

Liquidity risk

• The risk that an investor may have difficulty liquidating their sukuk holdings and may be forced to sell at a significant discount to market value.