2023-04-26 19:00:00
The UAE, represented by the Ministry of Finance as the issuer, announced the issuance of Islamic treasury sukuk “T-Sukuk” denominated in the local currency, dirhams, with a benchmark auction size of up to 1.1 billion dirhams.
And the ministry stated in a statement, yesterday, that it is cooperating with the UAE Central Bank, in its capacity as the issuance and payment agent for its issuance.
Slices
The Islamic treasury sukuk denominated in the local currency dirham includes tranches of varying duration between two, three and five years initially, and will be followed by the issuance of a 10-year tranche at a later time, and all of them will support efforts in building a bond market in the local currency, and developing the yield curve in the medium term in general.
best practices
The Ministry of Finance and the Central Bank are working with all concerned government agencies and international financial bodies to ensure the adoption and application of best international practices in structuring these sukuk, in order to allow for further development of Islamic finance in the country, and to enhance the country’s vision as an international center for the Islamic economy.
The structuring of Islamic sukuk was approved by the Supreme Shari’a Authority of the UAE Central Bank, which in turn aims to standardize and unify the practices of Islamic financial institutions, to be compatible with internationally recognized Sharia standards and best practices, through cooperation with the concerned authorities.
Agent banks
The Ministry of Finance published the main code for the agent banks, which include eight banks: Abu Dhabi Islamic Bank, Dubai Islamic Bank, Abu Dhabi Commercial Bank, Emirates NBD, First Abu Dhabi Bank, Mashreq Bank, HSBC Bank, and Standard Chartered, as Principal distributor for participants in the primary auction of Islamic Treasury Sukuk «T-Sukuk» and responsible for the development of the secondary market.
Financial certificates
The Minister of State for Financial Affairs, Mohammed bin Hadi Al-Husseini, affirmed the UAE’s keenness to develop the Islamic economy and consolidate the establishment of an investment structure to lead the Islamic economy as one of the pillars of the local economy.
Al-Husseini said: “The Ministry of Finance cooperates with all its partners, led by the Central Bank of the United Arab Emirates, to attract investments and employ them in the channels of the Islamic economy, as Islamic treasury sukuk constitute financial certificates compatible with Islamic law, and they will be traded in a way that reflects the local return on investment and supports diversification.” Economic and financial inclusion, as well as contribute to achieving the goals of comprehensive and sustainable economic and social development.
He referred to the role of Islamic sukuk in building a local currency sukuk market, diversifying financing sources, revitalizing the local financial and banking sector, as well as providing safe investment alternatives for local and foreign investors, and building a yield curve denominated in UAE dirhams, which enhances the local financial market and improves the investment environment in general. .
global hub
For his part, the Governor of the Central Bank of the Emirates, Khalid Muhammad Balaama, stressed the importance of issuing Islamic treasury sukuk in developing local sukuk markets, diversifying financing resources, and strengthening the infrastructure to support investment options and alternatives that are compatible with the provisions of Islamic Sharia, in a way that contributes to the development of the Islamic financial sector. Improving the investment environment, and consolidating the UAE’s position as a leading global center in the Islamic finance sector.
Balama said, “The issuance of Islamic treasury sukuk comes within the framework of the UAE’s commitment to developing capital market activities and consolidating its position as a global financial center, as this issuance confirms the strength and stability of the financial system and the confidence of local and international investors in the ability of the UAE to develop the financial sector in accordance with monetary policies and strategic plans ».
competitive
He added: “With the development of an effective infrastructure for the financial markets, we are confident that this issuance will contribute to supporting the market for bonds denominated in the local currency and issued by the public sector in the country, and will enhance the competitiveness of the local financial markets, and will enable dealers in the country to maintain a single, transparent and diversified group.” It will also contribute to the implementation of the new monetary framework for the dirham, and to support the ongoing work to establish a risk-free pricing standard in dirhams (yield curve), which would stimulate more local market activities, to support the sustainability of the country’s economic growth.
Approval of the sukuk structure by the Supreme Sharia Board, with the aim of standardizing and unifying the practices of Islamic financial institutions.
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