Muscat: Oman's Ministry of Finance announced to launch of the third issue of sovereign Islamic bonds (sukuk) denominated in Omani rials within the framework of the sovereign sukuk programme launched in 2019.

The bond issue will be presented to investors through a mechanism for the book-building process and will include a segment for small investors.

"The third issue of the sovereign sukuk programme is expected to contribute to boosting the rapid growth of the Islamic financial sector in Oman, and is part of the government's strategy to deepen and expand the capital market in order to enable it to play a greater role in the local economic growth," the Ministry of Finance said in an online statement to ONA.

The ministry has appointed Bank Muscat and its Islamic window (Meethaq) to manage the bond issuance and it can be subscribed through all licensed banks operating in the Sultanate.

The sukuk issue will be listed on the Muscat Securities Market (MSM) and the Muscat Clearing and Depository Company (MCDC) will undertake all matters related to the registration of Islamic bonds and the payment of these Islamic bonds holders, the ministry said.

The statement further said that Oman is currently facing financial challenges as a result of the decline in oil prices and the consequences of COVID-19 pandemic, which have directly contributed to the sharp decline in global oil prices since the beginning of this year.

The Sultanate’s commitment to the planned reduction of oil production within the Opec Plus group, which was directly reflected in the financial estimates of oil revenues that were approved in the state’s general budget at the beginning of the current year 2020."

The ministry said that Oman has taken several financial measures in order to curb government spending and reduce the size of the growing fiscal deficit, most of which have focused on reducing public spending items.

Also to meet the requirements of the approved financing plan for this year, development bonds worth OMR550 million were issued besides recently receiving a bridge loan of OMR770 million.

The ministry affirmed, "The government continues to monitor and evaluate its financial performance and the results of the financial measures it takes in the context of addressing the effects of the financial crisis and work are underway to issue an integrated package of measures."

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