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The expected profit distribution from the Sukuk serves as the primary source of payment for the financed amount, aiming to boost the return on investment through increased exposure to these Sukuk.
Discover the benefits of Sukuk Finance with ADIB and seize this opportunity to grow your investments in a Sharia-compliant manner.
Obtaining financing to invest in Sukuk may increase returns, offering the possibility of higher gains.
Reference Rate +(0.75 to 1.5%)
Value Added Tax (VAT): 5%
Minimum Investment Amount from the customer before the financing: $100,000.00
Q: What is a Sukuk Financing Program?
A: ADIB will offer financing to you for the purpose of investing in Sukuk. You will be able to apply for financing against your initial investment amount. The Sukuk will be held as collateral with ADIB against the financing amount and the expected profit distribution received from the Sukuk will be the source of repayment for the financed amount.
Q: What is the minimum investment amount to subscribe to the Sukuk Finance?
A: $100,000.00
Q: I am 17 years old; can I invest in the Sukuk Finance program ?
A: No, the minimum age for investors is 21 years.
Q: Are there any fees when I redeem my investment amount?
A: There are no applicable fees for redemption.
Q: Is my investment secured, and capital protected?
A: No
A: A margin Call occurs when the value of the financed Sukuk investment falls below a certain threshold, requiring the investor to deposit additional funds or securities to maintain the required margin level.
Q: What happens if I receive a Margin Call?
A: Upon receiving a margin call, you must promptly deposit additional funds or securities to meet the margin requirement. Failure to do so may result in the liquidation of your financed Sukuk to cover the shortfall.
Q: What is liquidation event?
A: Liquidation involves selling off financed Sukuk holdings to meet margin requirements or cover losses. This can occur if the investor fails to meet a Margin Call or if the value of the investment continues to decline.
Q: How can I avoid a margin call or liquidation?
A: To avoid a margin call or liquidation, closely monitor your financed Sukuk investment with your ADIB RM and maintain sufficient funds in your account to cover potential losses.
Q: What are the risks associated with Margin Calls and liquidation?
A: Risks include significant financial losses, forced liquidation of your investment at unfavorable prices, and the possibility of losing more than your initial investment due to financing.
Q: What are the risks associated with investing in the Sukuk Financing program?
A: The risks include:
Increased Market Risk: Sukuk Financing amplify both potential gains and losses. Market fluctuations can have a more significant impact on leveraged investments compared to non-leveraged ones.
Credit Risk: Financed Sukuk carry the credit risk of both the Sukuk issuer and the financing provider. Any deterioration in the creditworthiness of either party can adversely affect the investment.
Liquidity Risk: Financed investments may be harder to liquidate, especially during adverse market conditions. This can result in difficulties in selling the Sukuk at a favorable price or time.
Margin Calls: If the value of the Financed Sukuk falls below a certain level, the client will need to provide further collateral in the form of cash or additional Sukuk acceptable to the bank.
Liquidation Events: In the event of a significant decline in the value of the Sukuk or the inability to meet margin requirements, a forced liquidation may occur. This can result in the sale of the Sukuk at a loss, potentially eroding the invested capital and expected returns.
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