Issuance of Sukkuk is better or Private Placement of Securities?

Yes. Sukkuk is better for the following reasons;.

Benefits of Sukuk for CORPORATES

Sukuk offer considerable advantages some of which are summarized below:

• Liquidity Management: Sukuk with different majorities combined with an active secondary market provide an excellent tool for Islamic Finance Institutions to help manage the liquidity.A financial institution with excess liquidity may choose to invest in Sukuk that will offer a return and can be traded if required.

• Fundraising:Sukuk can provide a tool for corporates who are in need of cash for specific objectives to raise the necessary refunds.

• Securitisation:Sukuk can be used by an Islamic Finance Institution or a corporate as a means to release in funds tied up in assets through securitisation and than to reinvest the proseeds.

• Balance Sheet Management:Sukuk can be used by corporates to achieve an optimum balance between debt and equity on their balance sheet.

FOR INVESTORS

• Sharia’a Complient Asset Class:The benefits include the ability to invest in the Sharia’a complient asset class which generally offers a lower level of risk and a predictable rate of return.

• Tradability:If the investors are in need of cash, then these instruments are tradable and allow for easy liquidation.

Agreed with the answer Mr. VENKITARAMAN

AGREE WITH MR VEKITARAMAN ANSWER