SICO BSC (c), a leading regional asset manager, broker, market maker and investment bank (licensed as a wholesale bank by the CBB), announced today that it has signed an agreement to begin offering the Bahrain Bourse’s newly established sukuk-based Murabaha service, launched in collaboration with the Central Bank of Bahrain (CBB), when conducting Islamic commodity Murabaha financing transactions with sukuks as collateral. The announcement was made at a virtual signing ceremony held on 14 July 2020 between SICO, The CBB and The Bahrain Bourse.

“We are extremely pleased to be part of this platform and would like to commend the CBB and the Bahrain Bourse for their efforts in offering innovative solutions that support Sharia-compliant asset management services,” said Najla Al-Shirawi, Chief Executive Officer at SICO. “We hope that with this partnership and other collaborative efforts, we can leverage such initiatives in order to further build on the successful track record of our asset management business and increase our range of financial service offerings across Bahrain and the region.”

Shaikh Khalifa bin Ebrahim Al Khalifa, Chief Executive Officer of BHB said, “The Ijara sukuk-based Murabaha service is a creative shariah-compliant solution aimed at addressing the growing inter-bank needs. The unique service allows participating financial institutions to offer Sharia’a-compliant Murabaha service through an efficient process, and hence contributing to promoting the Kingdom of Bahrain as a hub for Sharia-compliant transactions.”

The new service will complement SICO’s current Murabaha facility structures, which is conducted by way of local and international commodity brokers, and is set to increase overall demand for sukuk issuances, providing support to Sharia-compliant financing services and increasing sukuk trading volumes on the Bahrain Bourse. The platform was established by the Central Bank of Bahrain and the Bahrain Bourse with the aim of promoting Sharia-compliant structures as a major financing option across Bahrain by affording customers efficient and competitive funding while ensuring premium structuring, documentation and execution of the transactions.

The platform is set to help SICO further expand on its asset management business, which includes depending on clients’ appetite for leveraged strategies. SICO’s asset management clients are currently able to benefit from a consolidated, comprehensive range of collateralized funding facilities for liquidity and general trading purposes.

SICO’s asset management division offers market-leading services to institutions and high-net-worth clients across the GCC. The division’s mandates cover funds and portfolios that invest in conventional and Sharia-compliant equities, short-term instruments, debt issues (sukuks) and fixed income securities.  SICO’s signature equity and fixed income funds consistently outperform their respective benchmarks, securing top spots on league tables each year.

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