Monday, March 24, 2014
'More sukuk needed to maintain liquidity'
The seminar highlighted the importance of issuing sukuk in the Oman market. The instrument help diversify portfolio and investment opportunities in the form of new asset class. Bank Muscat plans to raise OMR500 million by way of Meethaq Sukuk Programme. - Supplied photo
Muscat: Tapping into reasonably good demand for Sharia-compliant products in the Sultanate, Shaikh Abdullah bin Salem Al Salmi, executive president of the Capital Market Authority (CMA), is optimistic that Oman will see the issuance of more sukuks. This follows the announcement by Bank Muscat to raise OMR500 million by way of Meethaq Sukuk Programme.
Sukuk is a certificate of undivided interest in the asset to be procured or constructed out of the amount pooled by the investors.
Sustained growth Shaikh Abdullah bin Salem Al Salmi presided at the high-profile seminar attended by policy makers, Sharia scholars and key representatives of the Islamic banking industry in Oman and the region, in the presence of Abdul Razak Ali Issa, chief executive officer of Bank Muscat .
Shaikh Abdullah bin Salem Al Salmi commented, "The seminar echoes the Islamic banking industry's consolidation phase in Oman focusing on investment opportunities and liquidity management tools to achieve sustained growth during the coming period."
Abdulhakeem Al Khayyat, managing director and chief executive of Kuwait Finance House, Bahrain, delivered the key-note address.
Sulaiman Al Harthy, group general manager (Islamic Banking), said, "Against the backdrop of the Islamic financial services industry gaining momentum in Oman, the seminar seeks to provide a strategic assessment focusing on innovative Islamic financial instruments and liquidity management products. The Islamic finance industry is growing very rapidly worldwide and this is a great opportunity for new Islamic banks as well as conventional banks to come together and create an environment which should make all of us proud, balanced with the Sharia law, Central Bank of Oman's guidelines, public demands and expectation and the rule of law as a whole."
Dr. Sayd Farook, global head (Islamic Capital Markets) of Thomson Reuters, said: "The seminar deals with a very important and timely assessment of the future of Islamic banking industry and how Islamic financial institutions in Oman can grow in an increasingly competitive environment."
Islamic banking future A session on the future of Islamic banking industry covered the strong demand for retail market potential in Islamic banking in Oman, exploring the options of full conversion to Islamic banking rather than opening dedicated windows, how Islamic banks can differentiate themselves and what customers are looking beyond Sharia-compliant in Oman.
In another session on capturing the opportunity with sukuk as a catalyst for foreign investment in Oman, the seminar highlighted how sukuk can offer local investors and financial institutions added portfolio diversification and investment opportunities in the form of new asset classes, whilst issuers can benefit from increased liquidity by tapping into the growing demand for Sharia-compliant investment products.
The session also addressed the investment sourcing potential which has not fully developed among corporates, while regulators are proactively trying to enhance the regulatory framework to support issuance. The session discussed regulatory aspects and ways to enhance issuance and attract market participants in order to build a vibrant market for Omani sukuk.
Another important discussion centred on developing indigenous and innovative solutions for liquidity management for Oman's Islamic finance industry. The session explored new liquidity management products to fill the yield curve and liquidity management issues faced by the Islamic banking industry.
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