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QInvest, NBO to support sukuk issuance in Oman

January 28, 2014

QInvest and National Bank of Oman (NBO) will together support local Omani entities by providing advisory and other solutions in relation to sukuk issuance in that country. "There is inherent demand for sukuk in Oman and issuers will find this space competitive compared to conventional bonds," Sayyid Wasfi Jamshid al-Said , deputy general manager of NBO, said at the recently held seminar on sukuk. Organisations that have up to now relied solely on traditional bank loans and conventional bonds will find that the sukuk markets offer a "compelling" way to diversify their sources of financing to ensure the cost efficiency and sustainability of their operations under various market conditions, he said. Oman government had recently announced plans to issue a 200mn Omani riyal sukuk on the domestic market this year. The issuance of sukuk provides Shariah-compliant investment opportunities to local investors while attracting foreign investors seeking opportunities in Oman . "We believe that this partnership will facilitate the increased awareness of sukuk as a financial instrument to the Omani issuer and investor base. The combination of NBO's entrenched local presence and our strong expertise in sukuk positions us at the forefront of the growth of sukuk issuance in Oman ," according to Hani Ibrahim , Head of Debt Capital Markets at QInvest. The first ever sukuk was issued by Shell MDS in Malaysia in 1990 and the first international sovereign sukuk was issued in 2001 by Bahrain , and marked the advent of the GCC ( Gulf Co-operation Council ) Islamic capital market. The global sukuk market has since grown, and marked a compound annual growth rate of 40.5% between 2008 and 2013, with new issuances of $140.2bn and $111.1bn in 2012 and 2013 respectively. "The growth is expected to continue in 2014 and beyond," a QInvest spokesman said, adding several first-time issuers are likely to enter the sukuk market this year. According to Thomson Reuters Zawya Sukuk Perceptions and Forecast Study 2014, sukuk issuance would continue to rise rapidly in the coming years and is expected to reach S$237bn by 2018.

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Source: Gulf Times (Qatar)

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