‘Global Islamic financing facing challenges’
KFH Group CEO Al-Nahedh participates in IMF World Bank Conference
KUWAIT CITY, Nov 12: KFH Group CEO Mazin Saad Al-Nahedh has highlighted challenges facing global Islamic financing, mainly understanding Sukuk, as saying that the majority of investors do not fully comprehend what is Sukuk, and thus avoid investing in it. He added, during his participation in the IMF World Bank Conference, that Sukuk are available in limited markets unlike bonds.
“Despite Kuwait’s long history in Islamic financing, there are still some legislative impediments, in addition to demands to amend certain regulations in collaboration with the Central Bank of Kuwait and regulatory authorities,” the CEO indicated.
He pointed out that as a result of these impediments; some parties who are interested in issuing Sukuk are forced to shift to other countries rather than Kuwait.
He said that the standardization facilitates for Islamic financial institution issuing joint Sukuk instead of confronting legislative differences amongst Sharia supervisory bodies.
“Such a model can be duplicated by issuing Sukuk in other markets, which contributes in the diversification of financing resources without having to solely depend on conventional bonds,” he continued, reiterating that Sukuk instruments are better in terms of risk and safer for investors.
As for imposing taxes on Sukuk transactions in general, Al-Nahedh said that this may lead to cost increase and loss of competitive privileges.
He affirmed that the global Sukuk market is witnessing a remarkable growth and presence in various markets at the global level, noting that KFH participation in arranging Sukuk issuance in South Africa, which is a non-Islamic country, confirms the importance of this issuance.
A photo from the event