Kuwait Finance House (KFH) Investment announced that it had taken part in arranging the Arab Gulf emirate Sharjah’s debut issue of sovereign sukuk, worth USD 750 million.
Sharja issued the sovereign sukuk (Islamic bonds) with an ijara structure and the demand was 10 times oversubscribed, reaching USD 7.8 billion, drawing regional and international financial institutions, KFH Investment CEO and Board Member Emad Youssef Al-Maneea, said in a statement.
Through the sovereign sukuk issuance, Sharjah is seeking to carry on with financing capital investment projects given priority in the emirate, he added.
The sukuk issuance implies rising interest in Islamic finance as a sovereign source of financing, Al-Maneea added, noting that Moody’s as well as Standard and Poor’s rated Sharjah A/A3.
Fifty percent of the demand on the USD 750-million sukuk came from the Middle East, 20 percent from the UK, 14 percent from Asia and 11 percent from Europe (UK excluded) and five percent from others. Banks’ share of the sukuk hit 39 percent, and another 39 percent went to investment funds, 18 percent for central banks, two percent for insurance companies and two percent for others.
Also arranging the Sharjah first sukuk issuance were HSBC, the National Bank of Abu Dhabi, the Sharjah Islamic Bank and Standard Chartered.
Ijara is an exchange transaction in which a known benefit arising from a specified asset is made available in return for a payment, but where ownership of the asset itself is not transferred.
Source : KUNA Kuwait News agency
