More firms turn to Islamic finance for development projects?: expert

A growing number of non-regional [GCC] organisations are turning to Islamic Finance, and in particular to sukuk instruments, to raise funds for their infrastructure and development projects

  

A growing number of non-regional [GCC] organisations are turning to Islamic Finance, and in particular to sukuk instruments, to raise funds for their infrastructure and development projects, affirms a leading UAE-based investment banking expert.

The comments from Zahid Aslam, Managing Director of Investment Banking at Dalma Capital Management Limited, come as the firm reports an almost one-third jump in enquiries regarding Sharia-compliant bond issuances from corporations outside of the GCC.

The news follows S&P Global Ratings predicting in January the global issuance of Sharia-compliant foreign and local currency bonds is expected to reach as much as US$115 billion (Dh422.1bn) this year.

“It is our experience that sukuk-based solutions are establishing themselves as an increasingly attractive alternative for the funding of infrastructure and development projects,” observes Mr. Aslam. “For example, we are currently working with clients on a variety of ‘off the beaten path’ projects, including a refinery initiative in the CIS region and a scheme to help develop eco-tourism and sustainable farming in several African nations. We are also seeing interest from Malaysia, Indonesia and Pakistan.”

He continues: “I would suggest that there are five main drivers for this significant upward trend for sukuk-issuance to continue this year and beyond.

“Firstly, lower oil prices – despite recent gains – have created a funding shortfall for many.

“Secondly, there is notable and mounting pressure on global liquidity.

“Thirdly, the U.S. Federal Reserve’s ongoing plans to slowly raise interest rates, making borrowing more expensive.

“Fourthly, global regulation is enhancing and becoming more Islamic finance-friendly.

“Finally, general awareness outside the GCC of the uses and benefits are becoming ever-more understood and valued. Dalma Capital, being a licensed and regulated asset manager and investment boutique with a network of institutions and accredited partners, provides all the necessary solutions for sukuk issuers and investors.”

Zachary Cefaratti, CEO at Dalma Capital concluded “There is growing evidence that potential borrowers who had never considered Islamic Finance are better understanding the clear benefits of such solutions.

“This is cemented by the fact that deals can be structured to be project based, not centred solely on the credit standing of the borrower. Numerous virtuous aspects of the nature of Sukuk will continue to bolster their prevalence in capital markets globally.”

-Ends-

About Dalma Capital:
•Dalma Capital Management Limited is an alternative investment fund accelerator and advisory firm focused on alternative investments and innovative financial products. The company primarily serves institutions, family offices and corporations - managing their alternative investment products and advising on innovative financial products including Sukuk as well as blockchain-enabled fundraising solutions, relying on the firm’s expertise in global capital markets, its global edge in Islamic Finance and its proficiency in alternative investments. The company also specializes in identifying and accelerating alpha generating investment strategies and top-quartile portfolio managers through its alternative investment accelerator.

For enquiries, contact Dalma Capital’s Investment Banking Desk -  ib@dalmacapital.com 

© Press Release 2019

Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an “as is” and “as available” basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release.

The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk.

To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.

More From Press Releases