Financial Ratios and These Effects Toward Sukuk Yield with Sukuk Risk as a Mediator Variable

Muhamad Abduh, Fitri Sri Handayani



Purpose - This study aims to demonstrate the impact of financial ratios on sukuk yield using sukuk risk as a mediator variable.

Methodology - This study focused on corporations in general and employed path analysis and the Sobel test. The secondary data used for this study spans the years 2017 through 2019, with a total of 33 sukuks still outstanding for each year.

Findings-According to the study's findings, corporate liquidity has little bearing on sukuk yield or risk. Corporate leverage, meanwhile, has a positive impact on sukuk yield and a negative one on sukuk risk. Furthermore, whereas sukuk risk cannot mediate the impact of corporate liquidity on sukuk yield, it can mediate the impact of corporate leverage on sukuk yield. The research's implication is that it is not necessary to avoid taking on larger sukuk risk in order to raise company leverage by boosting capital structure.


Sukuk Yield, Sukuk Risk, Financial Ratios, Path Analysis, Sobel Test

Full Text:



Afshar, T. A. (2013). Compare and contrast Sukuk (Islamic Bonds) with conventional bonds, are they compatible?. Journal of Global Business Management, 9(1), 44.

Ahmad, W., & Radzi, R. M. (2011). Sustainability of sukuk and conventional bond during financial crisis: Malaysia’s capital market. Global Economy and Finance Journal, 4(2), 33-45.

Aloui, C., Hammoudeh, S., & Hamida, H. B. (2015). Co-movement between sharia stocks and sukuk in the GCC markets: A time-frequency analysis. Journal of International Financial Markets, Institutions and Money, 34, 69-79.

Ariff, M., Chazi, A., Safari, M., & Zarei, A. (2017). Significant difference in the yields of Sukuk bonds versus conventional bonds. Journal of Emerging Market Finance, 16(2), 115-135.

Asness, C. S., Frazzini, A., & Pedersen, d. L. (2018). Laverage Aversion and Risk Parity. Financial Analysts Journal Vol. 68, 47-59.

Bachtiar, S. A., Risza, H., & Naomi, P. (2018). Sukuk Return and Risk: A Comparison between Ijarah and Mudharabah-based Contracts. ICIEBP 2017 - 1st International Conference on Islamic Economics, Business and Philanthropy (hal. 163-168). SCITEPRESS .

Bhuiyan, R. A., Rahman, M. P., Saiti, B., & Ghani, G. M. (2019). Co-movement dynamics between global sukuk and bond markets: New insights from a wavelet analysis. International Journal of Emerging Markets.

Braouezec, Y., & Lehalle, C.-A. (2010). Corporate Liquidity, Dividend Policy and Default Risk: Optimal Financial Policy and Agency Costs. International Journal of Theoretical and Applied Finance Vol. 13 No. 4, 537-576.

Chen, T.-K., Liao, H.-H., & Tsai, P.-L. (2011). Internal Liquidity Risk in Corporate Bond Yield Spreads. Journal of Banking and Finance 35, 978-987.

Che-Yahya, N., Abdul-Rahim, R., & Mohd-Rashid, R. (2016). Determinants of Corporate Bond Yield: The Case of Malaysian Bond Market. International Journal of Business and Society, Vol. 17 No. 2, 245-258.

Ejsing, J., Grothe, M., & Grothe, O. (2012). Liquidity and Credit Risk Premia in Goverment Bond Yields. Frankfurt am Main: European Central Bank.

Elton, E. J., Gruber, M. J., Brown, S. J., & Goetzmann, W. N. (2014). Modern Portofolio Theory and Investment Analysis edisi-9. Wiley: New York.

Godlewski, C. J., Turk-Ariss, R., & Weill, L. (2013). Sukuk vs. conventional bonds: A stock market perspective. Journal of Comparative Economics, 41(3), 745-761.

Hamida, N. H., Zakaria, N. B., & Aziz, N. H. (2014). Firms’ Performance and Risk with The Presence of Sukuk Rating as Default Risk. Procedia - Social and Behavioral Sciences 145, 181-188.

He, Z., & Xiong, W. (2012). Rollover Risk and Credit Risk. The Journal of Finance Vol. LXVII, No. 2, 391-429.

Kamarudin, M. F., Kamaluddin, N., Manan, S. K., & Ghani, G. M. (2014). Defaulters Profile in Malaysia Sukuk Market. Precedia - Social and Behavioral Science 145, 277-285.

Melzatia, S., & Doktoralina, C. M. (2018). Yield Sukuk: maturity, rating and value of emission. Research Journal of Finance and Accounting, ISSN, 2222-1697.

Merdad, H. J., Hassan, M. K., & Hippler III, W. J. (2015). The Islamic risk factor in expected stock returns: an empirical study in Saudi Arabia. Pacific-Basin Finance Journal, 34, 293-314.

Naifar, N., & Hammoudeh, S. (2016). Dependence structure between sukuk (Islamic bonds) and stock market conditions: An empirical analysis with Archimedean copulas. Journal of International Financial Markets, Institutions and Money, 44, 148-165.

Nashikkar, A., Subrahmanyam, M. G., & Mahanti, S. (2011). Liquidity and Arbitage in the Market for Credit Risk. The Journal of Financial and Quantitative Analysis Vol. 4 No. 3, 627-656.

Nasir, A., & Farooq, U. (2017). Analysis of value at risk of Sukuk and conventional bonds in Pakistan. Journal of Islamic Accounting and Business Research.

Nasreen, S., Naqvi, S. A. A., Tiwari, A. K., Hammoudeh, S., & Shah, S. A. R. (2020). A wavelet-based analysis of the co-movement between Sukuk bonds and Shariah stock indices in the GCC region: Implications for risk diversification. Journal of Risk and Financial Management, 13(4), 63.

Noviana, L., & Solovida, G. T. (2018). Pengaruh Likuiditas , Leverage, Rating Obligasi Syariah , Risiko Obligasi Syariah Terhadap Yield Obligasi Syariah (Sukuk). Stability: Journalof Management & Business Vol. 1 No.2, 171-188.

Saad, N. M., Haniff, M. N., & Ali, N. (2020). Corporate governance mechanisms with conventional bonds and Sukuk’yield spreads. Pacific-Basin Finance Journal, 62, 101116.

Said, A., & Grassa, R. (2013). The determinants of sukuk market development: does macroeconomic factors influence the construction of certain structure of sukuk?. Journal of Applied Finance & Banking, 3(5), 251-267.

Shalhoob, H. S. (2018). The Determinants of Sukuk. Scientific Journal for Economic & Commerce, 587-624.

Utami, S. A., & Rohmana, Y. (2019). Does Profitability, Firm Size, and Macroeconomic Variable Affect Yield to Maturity of Corporate Sukuk? The International Journal of Business Review (The Jobs Review), Vol. 2 No. 2, 75-88.

Wang, H., Zhou, H., & Zhou, Y. (2013). Credit Default Swap Spreads and Variance Risk Premia. Journal of Banking & Finance 37, 3733–3746.

Yesuf, A. J. (2016). A Comparative Analysis of Sukuk and Conventional Bonds. Springer International Publishing Switzerland, 417-438.



  • There are currently no refbacks.

Copyright (c) 2022 Muhamad Abduh, Fitri Sri Handayani

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Creative Commons License

Review of Islamic Economics and Finance is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

View My Stats