14 February 2015
Lack of Islamic secondary markets mitigates expansion and growth opportunities.

"KFH succeeded in developing Islamic financial services and capital markets during the last 2 decades through participation in Sukuks issuance and efforts to develop Sukuk markets" said Mr. Emad Al-Monayea, Board Member and CEO - KFH Investment Company. KFH has participated in the issuance of Sukuks of various governments and companies in GCC countries, Turkey, Japan, United States, Britain and South Africa. KFH provides technical support to entities intending to issue Sukuks in order to enable them to issue Sukuks successfully without any hindrance or obstacles.

Mr. Al-Monayea, in a presentation delivered at Euromini Conference at London named "Islamic Finance & Investment" highlighted KFH experiment in Sukuk issuance in general, namely during the year 2014 and the support which it has provided to make all Sukuk issuance deals a success. KFH subscriptions surpassed the required amounts. KFH played a significance role as a guarantor for the success of new Sukuks issuances due to the trust which KFH enjoys globally among investors and global markets. KFH has participated remarkably in the diversification of customers funding, increase number of Sukuk issuers and the size of amounts invested in this field.

Mr. Al-Monayea reiterated that KFH shall endeavor to increase the issuance of more Sukuks for governments and companies worldwide in order to reinforce and support the role of this product. This product is  considered as the legislative substitute for bonds and participates in providing finance for several projects in an innovative manner and sound mechanism. KFH seeks to reinforce and support Islamic banking role in major projects and increase development efforts in various societies.

Mr. Al-Monayea indicated that sufficient efforts are exerted in the issuance of Sukuks and several countries and marjoram companies have shown great interest in this product. However, the lack of secondary Islamic markets is still mitigating the possibilities of expansion and growth in this vital and axillary activity in the world of Islamic banking. Several countries lack appropriate laws to organize the issuance and dealing process of Sukuks. Sukuks are one of the tools through which banks are able to manage liquidity in case there is a secondary market for issuance of Sukuks.

During the conference, representatives of South Africa emphasized their experience in the first issuance of sovereignty Sukuks last September and how this matter has participated in facilitating Islamic economy affairs. Several entities have adopted this type of finance and investment. They highlighted KFH role as one of the main organizers of these Sukuks. These Sukuks are considered as the first sovereignty Sukuks in Africa. Significant assets were used to issue these Sukuks. Accordingly, Sukuks were given considerable rating by major global rating agencies e.g. Moody's, Fitch, Standard & Poor's.

British government was the first European country to issue sovereignty Sukuks in 2014. Britain has shown remarkable interest in Islamic finance. It seeks to occupy a leading position in this sector as it is the case with Malaysia and UAE. Central Bank of Britain endeavors to introduce liquidity tools to serve Islamic banks as well as traditional banks. Appropriate legal environment is considered as one of the basic elements to support and facilitate Islamic economy in Britain. A major part of the contracts used by Islamic organizations are governed by the British law.

The size of Islamic finance sector exceeds US$ 1.8 trillion and witnesses a rapid growth which is expected to surpass 20% during the next few years.

-Ends-

Kuwait Finance House (KFH)
KFH was established in Kuwait in 1977 and is enlisted in the Kuwait Stock Exchange. KFH Group is a global pioneer in the field of Islamic banking services, where it offers a wide array of Islamic products and services, not to mention a high standard of innovation and client service.

KFH manages its operations in the GCC, Asia, and Europe through over 380 branches, including KFH-Turkey, in order to offer services for the bank's clients in Turkey, Malaysia, Saudi Arabia, Bahrain, Australia, Jordan, Dubai, and Manheim in Germany.

KFH's mission is to achieve highest levels of excellence and innovation in the field of client service, while developing common interest for all those concerned with the financial institution. KFH's vision is to spearhead the global development in Islamic financial services, and to upgrade the bank into the level of becoming the most sustainable profitable Islamic bank in the world.

KFH's values include cementing leadership through all its businesses, including leadership in the Islamic banking services worldwide, through innovation and in client service and the development of its employees. In addition, KFH is committed to all its procedures, and to setting up long-life partnerships with the concerned authorities.

For more information, please visit: www.kfh.com

© Press Release 2015