Muscat: Oman government has assigned a specialised institution to structure the country's first sovereign Islamic bond or sukuk issue, which may be floated by early next year, the country's central bank chief told Times of Oman. The Sultanate plans to raise OMR200 million by way of a sukuk issue.
"The government is studying issuing sukuk and have also invited some specialised institutions who are knowledgeable in structuring sukuk issues," Hamoud Sangour Al Zadjali, executive president of the Central Bank of Oman (CBO) said, on the sidelines of 'Technology Evolution and Banking Conference' organised by Bank Muscat here on Tuesday.
He said the issue may be floated by early next year, if not by the end of the current year.
"It (the issue proceeds) will be used for funding some of the projects," added the CBO chief.
Oman government earlier formed a working committee to issue sovereign sukuk, in a move to fund infrastructure projects in the near future. The committee members were from the Ministry of Finance, CBO and Capital Market Authority (CMA) and they are now discussing various aspects of raising funds by way of a sovereign sukuk, which is generally asset backed.
The purpose of the sukuk issue is to deepen the financial market in the Sultanate. In fact, it will enable the Islamic banking institutions and the windows to invest some of their excess liquidity in a secured instrument.
Al Madina Investment last year arranged the first corporate sukuk in the Sultanate for Tilal Development Company (TDC). This sukuk, with an issue size of OMR50 million, was based on the Ijarah structure.
© Times of Oman 2014
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