'Trust in Islamic banking rising fast'
Customers' trust in Islamic banking will increase exponentially once the sector's assets reach $3.3 trillion by 2021 as predicted, Sultan bin Saeed Al Mansouri, UAE Minister of Economy and Chairman of Dubai Islamic Economy Development Centre (DIEDC).
"This will nominally increase sukuk issuance in the coming years and lead to the implementation of major development plans on both regional and global scales," the minister said.
He made the remarks at the announcement of DIEDC's collaboration with Nasdaq Dubai to design and implement new initiatives that complement Dubai's success in emerging as a leading global sukuk-listing hub.
The announcement was made at a session to present updates on the Dubai Global Sukuk Centre initiative to His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.
DIEDC outlined plans for developing the sukuk market and increasing sukuk issuances and listings in Dubai in order to boost economic growth.
The session was attended by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Dubai Executive Council, Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai and First Deputy Chairman of the Dubai Executive Council, Sheikh Ahmed bin Saeed Al Maktoum, Chairman of Dubai Civil Aviation Authority and Chairman and CEO of Emirates Group, as well as a number of directors at government entities and departments in Dubai.
Al Mansouri noted that sukuk has become a preferred tool for financing development projects around the world due to the stringency of its standards that guarantee wealth sustainability.
"With its respect for the ethics of economic activity, sukuk revitalises the economy based on the principle of contribution rather than debt pressure," Al Mansouri said.
A key objective of the 'Dubai: Capital of Islamic Economy' initiative that was launched in 2013 was achieved when Dubai was globally ranked in the first place over other global capitals as the largest platform worldwide for attracting and listing Islamic sukuk. The joint efforts of DIEDC and Nasdaq Dubai will bring forward new product propositions. More specifically, the synergy will introduce retail instruments that allow individuals to invest in the sukuk market in a bid to expand the investor base while providing diverse investment options. In addition, both entities will provide the required technical support to facilitate the process of issuing and listing sukuk and seek to attract new stakeholders within and outside the UAE.
Essa Kazim, secretary-general of DIEDC, noted that sukuk is an ideal tool for financing sovereign projects worldwide, especially given the global trend to invest in non-oil production sectors and diversify national income sources. He commended Nasdaq Dubai's efforts to support the Dubai Global Sukuk Centre initiative, and highlighted the importance of building on previous successes to develop new initiatives that boost the contribution of Islamic finance to the national economy.
Abdulla Mohammed Al Awar, CEO of DIEDC, stressed the centre's keenness to strengthen the role of Islamic finance institutions and banks, as well as work with its strategic partners to raise awareness about Islamic financial instruments, particularly sukuk, with the aim of stimulating development projects that ensure sustainability. He also highlighted the need for a qualified workforce to develop a sophisticated structure for sukuk issuance.
Hamed Ahmed Ali, CEO of Nasdaq Dubai, said that the growing demand of investors that has been met with a proportional increase in sukuk issue locally and internationally, reflects sukuk's position of power as a core financing tool for governments and companies alike.
He said the Dubai Global Sukuk Centre initiative reflects the leadership's vision for the future of Dubai with 72 sukuk listings totalling $59.2 billion taking place as part of the initiative - 39 of which, at a total value of $26.26, are for entities and companies within the UAE, and 33 valued at $32.95, are for companies and governments outside the UAE. - firstname.lastname@example.org