Which type of sukuk is most common?

Ijarah (lease) and wakala (agency) structures, often combined in hybrids, dominate international issuance because they produce stable, tradable certificates with a tangible asset. Murabaha remains common in domestic markets such as Malaysia and Saudi Arabia.

Which sukuk types can be traded on a secondary market?

Sukuk that represent ownership of tangible assets or usufructs (ijarah, most wakala and hybrids with a majority tangible pool) are tradable. Sukuk that represent a debt (murabaha, salam) are generally held to maturity in Gulf practice, though Malaysian rulings have historically allowed more debt trading.

What is a hybrid sukuk?

A sukuk whose asset pool mixes contracts, typically ijarah or wakala assets with murabaha receivables. The pool must keep a stated minimum of tangible assets, commonly a majority, so that the certificate as a whole remains tradable.

Why did mudaraba and musharaka sukuk become rare?

Because AAOIFI's 2008 resolution barred managers from promising to buy back the assets at face value in partnership structures, which removed the capital guarantee investors expected. Issuers moved to lease and agency structures that could offer a fixed buy-back price without the same objection.

Types of Sukuk: Ijarah, Murabaha, Wakala and More

Every sukuk is a certificate wrapped around an ordinary Islamic commercial contract. Learn the eight contracts and you can read any sukuk term sheet. Here they are, each in the time it takes to drink a coffee.

The quick reference table

Type	Underlying contract	Your return comes from	Tradable?	Watch out for
Ijarah	Lease	Rent paid by the lessee	Yes	Who bears maintenance and insurance; buy-back price
Murabaha	Sale on deferred payment	Mark-up built into the sale price	Generally no (it is a debt)	Secondary trading rules differ by country
Mudaraba	Profit-sharing partnership (capital from you, work from the manager)	Share of profit; losses fall on capital	Yes if assets are tangible	Capital guarantees (not allowed since 2008)
Musharaka	Joint-venture partnership (both sides contribute capital)	Share of profit per agreed ratio; loss per capital share	Yes if assets are tangible	Same guarantee issue as mudaraba
Wakala	Agency: you appoint an agent to invest	Profit from the investment pool; agent takes a fee	Yes if the pool is mostly tangible	Quality of the pool; incentive fees
Istisna	Order to manufacture or build	Delivery of the built asset, often then leased	Not until the asset exists	Construction risk
Salam	Advance payment for goods delivered later	Sale of the delivered goods	No	Price risk on the commodity
Hybrid	A pool mixing the above	Blended	Yes if tangible share stays above the minimum	Pool composition drift

Ijarah: the lease

The workhorse. The originator sells an asset to the issuing vehicle, which leases it straight back and passes the rent to certificate holders. At maturity the originator buys the asset back under a purchase undertaking, returning holders' capital.

Why it dominates: rent can be fixed or benchmarked, the asset is tangible, and a fixed buy-back price in a lease is widely accepted by scholars. Governments like it because they own plenty of buildings and land. The main thing to check is who carries the costs of owning the asset; in a proper ijarah the lessor (meaning the holders, through the vehicle) carries major maintenance and insurance, usually delegated back to the lessee as a service agent.

See the step-by-step ijarah walk-through if you want the mechanics drawn out.

Murabaha: the deferred sale

The vehicle buys a commodity (often metals on the London market) with investors' cash and sells it to the originator on deferred payment at cost plus a mark-up. The deferred payments are the holders' return.

What you hold is a receivable: the originator's promise to pay. Because a debt may not be sold at a discount under most Gulf rulings, murabaha sukuk are usually held to maturity there. Malaysia's Shariah Advisory Council has historically permitted trading of such instruments, so the same certificate can be liquid in Kuala Lumpur and illiquid in Riyadh. Murabaha remains common for short tenors and domestic programmes.

Mudaraba: capital meets expertise

Investors (rabb al-mal) provide capital; a manager (mudarib) provides work and skill. Profit is shared in an agreed ratio; financial loss falls on the capital providers alone, unless the manager was negligent.

The 2008 AAOIFI resolution bars the manager from promising to buy the assets back at face value, since that would shift loss to the manager and make the investors lenders in all but name. Without that guarantee, mudaraba sukuk carry equity-like risk, which most sukuk buyers do not want. Issuance shrank accordingly. The Dana Gas sukuk disputed in 2017 was a mudaraba.

Musharaka: the joint venture

Both the originator and investors contribute capital to a venture; profits are shared by an agreed ratio and losses strictly by capital share. Musharaka sukuk funded real estate and infrastructure projects in the mid-2000s, often with a schedule under which the originator bought out the investors' share over time (diminishing musharaka).

The same 2008 objection applies to fixed-price buy-outs. Musharaka sukuk still exist, especially where there is a genuine project with genuine profit, but they are a small share of the market.

Wakala: the agency

Investors appoint the originator as their agent (wakil) to invest their money in a pool of permissible assets, for a fixed fee and sometimes an incentive fee if returns exceed a target. Holders own the pool.

Wakala became the structure of choice for banks and companies that do not own one big leasable asset but do own many smaller ones, or a mix of leased assets and receivables. The rule of thumb is that tangible assets must be a majority of the pool for the certificates to trade. Khazanah Nasional's RM100 million tokenised pilot in April 2026 used wakala bi al-istithmar, agency for investment.

Istisna: build it first

A contract to have something manufactured or built: a road, a plant, a ship. Investors' cash pays the contractor; when the asset exists it is usually leased to the originator under an ijarah, so most istisna sukuk are really istisna-into-ijarah. Until the asset exists the certificates represent a right to a future asset, which is why they cannot be traded at that stage.

Salam: pay now, deliver later

An advance payment for goods of specified quality and quantity delivered at a future date; the holders' return comes from selling the goods on delivery. Used for commodities, and historically by Bahrain's central bank for short-term liquidity instruments. Salam certificates represent a debt in goods, so they are not traded.

Hybrids: most of what is issued now

A hybrid sukuk's pool mixes contracts, for example 60% ijarah assets and 40% murabaha receivables. The design goal is to keep the whole certificate tradable while using assets the originator actually has. Boards set a minimum tangible share and the issuer undertakes to maintain it; if the share drifts below the line, trading may have to stop until it is restored.

Pool drift is one of the clearest cases where continuous monitoring beats an annual audit, and one of the first jobs an AI agent in a sukuk lifecycle could usefully do: measure the ratio daily and raise a flag before the breach, not after.

Three questions that sort any sukuk

Do I own a thing or a debt? Things trade; debts mostly do not.
Where does my return come from? Rent, profit, fee or mark-up, and what happens if it is not earned.
How is my capital returned, and at what price? Fixed buy-back in a lease is accepted; fixed buy-back in a partnership is the structure scholars rejected in 2008.

For the arguments behind those answers, read are sukuk halal. For the vocabulary, the glossary.

Types of sukuk: ijarah, murabaha, mudaraba, musharaka, wakala, istisna, salam and hybrids