Dubai aims to lead sukuk mar­ket

The Pak Banker - - COMPANIES/BOSS -

The fu­ture of Is­lamic bonds, or sukuk, is bright and Dubai has po­ten­tial to be­come the world’s top sukuk mar­ket in coming years, a top of­fi­cial of Dubai Fi­nan­cial Mar­ket said.

“The out­look for sukuk mar­ket is good as its de­mand is very strong com­pared to con­ven­tional bonds. We are con­fi­dent about the success of the sukuk mar­ket in Dubai,” Essa Kazim, man­ag­ing di­rec­tor and chief ex­ec­u­tive of Dubai Fi­nan­cial Mar­ket (DFM), told me­dia per­sons on the side­lines of the list­ing cer­e­mony of Emi­rates air­line’s sukuk on Nas­daq Dubai on Wed­nes­day.

Shaikh ahmed bin Saeed ring­ing the open­ing bell at DFM to mark the emi­rates air­line’s $1 bil­lion sukuk list­ing on Nas­daq Dubai on Wed­nes­day. — Sup­plied photo

Shaikh Ahmed bin Saeed Al Mak­toum, Chair­man and Chief Ex­ec­u­tive of Emi­rates air­line and Group, rang the open­ing bell at DFM to mark the air­line’s $ 1 bil­lion sukuk list­ing on the ex­change. It brings the nom­i­nal value of sukuk listed on Dubai ex­changes to $ 10.625 bil­lion, the third largest to­tal in the world af­ter Lon­don and Malaysia.

The list­ing of the Emi­rates sukuk sup­ports Dubai’s in­ten­sive ef­forts to pro­mote Is­lamic econ­omy af­ter the launch of [Dubai the Cen­tre of Sukuk] ini­tia­tive by His High­ness Shaikh Mo­hammed bin Rashid Al Mak­toum, Vice-Pres­i­dent and Prime Min­is­ter of the UAE and Ruler of Dubai, and in line with his vi­sion to po­si­tion the emi­rate as the cap­i­tal of Is­lamic econ­omy glob­ally.

“As an in­ter­na­tional ex­change, Nas­daq Dubai gives our list­ing global vis­i­bil­ity whilst at the same time pro­vid­ing us with a list­ing in the city where we are based. The ex­change’s high reg­u­la­tory stan­dards and stream­lined list­ing pro­ce­dures make it an ideal venue for list­ing cap­i­tal-rais­ing se­cu­ri­ties,” Shaikh Ahmed said.

He said the air­line would use the money raised through the sukuk to fund new air­craft due to be an­nounced in coming months.

The sukuk is­sued by Emi­rates, one of the fastest grow­ing global air­lines, was sold suc­cess­fully to in­vestors across the globe. The Is­lamic bond was about three-times sub­scribed as ac­counts in Mena snapped up 85 per cent fol­lowed by Europe at seven per cent, Asia five per cent and off­shore US at three per cent.

Mo­hammed Ab­dulla Al Ger­gawi, Chair­man of the Ex­ec­u­tive Of­fice of Shaikh Mo­hammed bin Rashid Al Mak­toum, and Chair­man of the Higher Com­mit­tee for Devel­op­ment of the Is­lamic Econ­omy Sec­tor, said: “As the ex­pan­sion of Is­lamic econ­omy gath­ers pace, the Emi­rates sukuk pro­vides fur­ther ev­i­dence of Dubai’s ex­cel­lence as a cen­tre for is­su­ing, list­ing and trad­ing of Is­lamic cap­i­tal-rais­ing se­cu­ri­ties af­ter the suc­cess­ful list­ing of Dewa sukuk last week. We will con­tinue to strengthen the lead­ing po­si­tion of the UAE in this sec­tor through var­i­ous ef­forts and the cre­ation of a range of world­class Is­lamic fi­nan­cial prod­ucts, for both in­sti­tu­tions and in­di­vid­u­als.”

Essa Kazim, who is also the sec­re­tary-gen­eral of the com­mit­tee, said: “Dubai’s cap­i­tal mar­kets are grow­ing rapidly in scope and so­phis­ti­ca­tion, with Is­lamic fi­nance play­ing a lead­ing role. The is­suance of the Emi­rates sukuk, and its list­ing on Nas­daq Dubai, demon­strate the strength of Dubai’s fi­nan­cial mar­kets ar­chi­tec­ture and its abil­ity to serve lead­ing in­ter­na­tional com­pa­nies.”

“We are try­ing to cap­ture all sukuk re­lated to Dubaibased firms,” he said, adding that more sukuk list­ings on Dubai ex­changes are ex­pected this year.

Last week, Dubai Elec­tric­ity and Water Author­ity (Dewa) listed its $1 bil­lion sukuk on Nas­daq Dubai. Dubai Is­lamic Bank also launched a $1 bil­lion hy­brid sukuk last week and it is also ex­pected to list it in Dubai. Eti­salat Sukuk Com­pany and Al Hilal Bank are also ex­pected to is­sue $1 bil­lion sukuk each this year.

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