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May 02 2013

QAR8bn worth sukuk issued in Q1: QCB Governor

By MOHAMMAD SHOEB

DOHA: H E Sheikh Abdullah bin Saoud Al Thani, Governor of Qatar Central Bank ( QCB ), yesterday said that Islamic banks in Qatar issued sukuk worth QR8bn by the end of the first quarter of 2013. The QCB , on behalf of the government, has issued sukuk worth QR39bn to help manage the liquidity of Islamic financial institutions to comply with Basel III norms.

The sukuk issuances are likely to grow by 20 percent annually driven by high demand for Shariah- compliant products and finances globally.

Sheikh Abdullah, in his opening address at the International Conference on Sukuk, said the total volume of investments of banks operating in Qatar in Islamic sukuk or bonds reached QR47bn for the same period. He further said that sukuk and other Shariah compliant products are becoming increasingly popular among investors, particularly in Arab and Islamic countries.

"Despite international financial crisis, 2009 witnessed the issuance of $23bn worth of sukuk compared to $14bn in 2008. And with that the volume of international sukuk market increased from $111bn (in 2009) to $131bn in 2012."

The two-day conference, which concludes today, is organised by the International Islamic Centre for Reconciliation and Arbitration (IICRA) under the sponsorship of the QCB , and with Qatar Islamic Bank ( QIB ) acting as a strategic sponsor.

The IICRA is aiming to raise the profile of islamic banking in general and of sukuk industry in particular - along with discussing the latest thinking on issues facing all kinds of sukuk in all their processing stages: Issuing, trading, property, termination and insurance.

The QCB Governor said that the conference will help find practical solutions to address sukuk- related issues regulating to supervision, organising and maintenance of sukuk.

"Taking into consideration about the importance of Islamic financial tools, the QCB , on behalf of the State of Qatar, issued sukuk of QR39bn to manage liquidity for Islamic banks complying with the Basel III requirements," said the Governor.

Present were Dr Abdessattar Khouildi, General Secretary of IICRA; Hani Ibrahim, Head of Debt Capital Market, QInvest ; Professor Ali Muhyi Al Din Al Qura-Daghi, Secretary-General of the World Federation of Muslim Scholars, and many other distinguished speakers and scholars.

The establishment of Kula Lumpur-based 'International Islamic Liquidity Management Corporation' (IILM) in 2010 is expected to play a vital role in developing and expanding the volume of international Islamic financial market to improve the capacity of liquidity management by using high quality financial tools.

In the first quarter of 2013, sukuk issuances reached to $15bn and the issuance are expected to witness a double digit growth in the years to come. "Sukuk issuances are likely to grow by a further 20 percent annually driven by increasing investors' demand in the global marketplace," added Bassel Jamal, Group CEO of QIB .

"This will encourage corporate entities and government bodies to issue more sukuks especially in Qatar to provide liquidity to fund economic growth and large projects."

The global Sukuk market is currently witnessing a steady growth. The latest reports have revealed that sukuk issuances have surpassed $220bn since inception in early 2000.

In 2012, Sukuk issuances constituted 50 percent of market share of overall bond issuances (both Islamic and conventional) in the Gulf region with total issuance of $21.3bn compared to only a 23 percent share in 2011 with total issuance of $6bn.

"As for Qatari sukuk issuances in 2012, they reached 12 percent of the overall global sukuk issuances which accounted for $5.5bn out of $46bn," said Jamal.



© The Peninsula 2013

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