Influences of Macroeconomic Variables on Sukuk and Conventional Bonds Risk and Return: Evidence from Muslim Countries

Abstract

Researcher studied the impact of macroeconomic variables on the risk and return of Sukuk and conventional bond. Scope of this study covers the countries issuing Sukuk in large volume namely Malaysia, Bahrain, UAE, Pakistan and Qatar. Data taken over the period starting from 2009 and ends on 2018. Study examines the influence of GDP, Foreign exchange rate and interest rate on risk and return of Sukuk and conventional bonds. Statistical analysis was carried out by using Panel data Fixed effect and random effect model, Descriptive statistics and Correlation. Empirical results of statistical tools suggest that GDP and exchange rate show insignificant impact on risk and return of both Sukuk and conventional bonds only interest rate show a positive and significant impact on risk and return of both Sukuk and Conventional bond.