Sukuk Valuation

About the webinar

REDmoney webinars are pleased to bring you a short, comprehensive online webinar on the topic of Sukuk valuation. The free-to-access tutorial will use the example of a Sukuk Al-Ijarah and will examine risk and structure and how these factors directly influence the pricing of such an instrument. The webinar leader, Dr. Ken Baldwin will help you identify the risks faced by investors, in particular the risks inherent in the underlying assets and in the structure of a Sukuk Al-Ijarah itself. A practical example will be used to illustrate these vital concepts, leading to an explanation of how risk directly affects pricing. The webinar will then address other factors such as probability of default, risk exposure to the originator and likely recovery rate in the case of default. Incorporating terminal asset value assumptions and other metrics, an expected Sukuk value will be arrived at.

Webinar Leader

Dr Ken Baldwin 
Former MENA Regional Head of Quantitative Analysis, Citigroup and Former Head of Financial Polices, Islamic Development Bank

Dr. Ken Baldwin is a banking and finance practitioner with over 25 years’ experience in front and middle office positions, including 15 years in GCC Islamic retail and investment banks. Whilst at Abu Dhabi Islamic Bank, Ken built an ALM analytic technology platform, followed by his appointment as MENA Regional Head of Quantitative Analysis for Citigroup. Ken then worked on risk due diligence of corporate and real estate private equity transactions for Investcorp, before being appointed Chief Operating Officer for a new regional Islamic investment bank. Most recently, Ken was employed by the Islamic Development Bank, where he set up a new department tasked with developing Financial Policies and Planning underpinned by robust financial analytic tools. Ken graduated from Oxford University with a first-class honors degree, is a chartered accountant and has a PhD in the microeconomic theory of risk sharing in Islamic contracts.

What you will take away

  • Recognize and understand the two principal sources of risk faced by Sukuk investors
  • Understand the structure and cash flows of a Sukuk, in this case a Sukuk Al-Ijarah
  • Understand credit risks associated with cash flows as well as commitment to purchase assets at maturity
  • Identify and understand key aspects of pricing the instrument, including probability of default and various risk exposures
  • Use a simple model incorporating terminal asset value assumptions and other metrics to arrive at an expected Sukuk value