HH Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance, received a delegation from the Islamic Development Bank (IDB) on Wednesday at Zabeel Palace. The visiting delegation was headed by Dr. Abdul Aziz AlHinai, Vice President for Finance at IDB.
HH Sheikh Hamdan emphasised the importance of supporting Dubai's initiative as the capital of Islamic economy and highlighted IDB's position as a strategic partner and a major contributor to the achievement and success of this initiative. The UAE is considered one of the main founders of the Bank and has maintained a close partnership with IDB, as per the Federal Decree No. 91 of the year 1974. The UAE's contribution to the Bank's capital amounted to 1.36 billion Islamic Dinars (ID), i.e.7.54 per cent.
During the visit, IDB announced that it will issue Sukuk worth $1 billion, which will be listed in NASDAQ Dubai on Thursday, February 27th 2014. This announcement is the result of joint efforts between the Ministry of Finance, Supreme Committee of the Islamic Economy Initiative, NASDAQ Dubai and IDB.
The main objective behind this listing is to provide additional financial resources to support the Bank's expansion plans and to support Islamic economic and financial sectors within the UAE. Furthermore, the listing falls in line with the bank's medium term note programme, which recently increased from $6.5 billion to reach $10 billion.
Prior to listing these Sukuk, IDB, in collaboration with a group of investment banks, organised several meetings with investors from the Middle East and Asia in order to promote it.
In line with its desire to strengthen cooperation with Member States of the Bank and to establish an active Sukuk market, the Bank registered this programme with the Dubai Financial Services Authority to position NASDAQ Dubai as a platform for trading IDB's Sukuk, which are being listed in the UAE for the first time.
Dr Abdul Aziz AlHinai, Vice President for Finance of the IDB, said: "As the IDB expands its capital raising programme to fund activities across the Islamic world, the rapidly growing Islamic financial centre of Dubai is an excellent listing venue to underpin our Sukuk issuance. The UAE's Shari'ah financing traditions and expertise, and its location in the heart of the Islamic world, combined with its world- class regulatory and exchange architecture, provide the IDB and investors with an ideal listing venue."
For his part, HE Obaid Humaid Al Tayer, Minister of State for Financial Affairs, mentioned that the listing of IDB Sukuk in NASDAQ Dubai provides great support to the 'Dubai: Capital of Islamic Economy' initiative launched by HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.
HE said: "MoF's continuous search for strategic partnerships is aimed at strengthening the UAE's position in general and Dubai's in particular, on the Islamic economy world map. Islamic economy has recently received great attention worldwide and will play an important leading role in driving global economic growth over the next decade, due to its well-established and fair bases that provide essential security requirements for investors.
HE Al Tayer added: "The UAE's investment environment is well known for its stability and strong growth percentages, when compared to other countries in the Middle East and the world. This provides the UAE the ability to create a diverse investment climate, where Islamic economy will be one of its most established and supporting infrastructures, which is what the initiative 'Dubai as the Capital of Islamic Economy' called for."
HE also praised IDB's initiative in listing its Sukuk in NASDAQ Dubai. In addition, HE highlighted MoF's keenness to support the development strategy for Islamic economy and the diversification of Islamic banking services in the UAE, which will contribute in making Dubai the centre of Islamic economies regionally and globally.
Moreover, HE stated that investments in Sukuk that will be issued by IDB in NASDAQ Dubai will allow investors to diversify their investments safely, away from any disturbances. HE also highlighted that these Sukuk will play a role in expanding the available services in the Islamic markets as a result of increased liquidity rates.
HE Al Tayer concluded: "Dubai has a great opportunity to succeed in its Islamic Finance initiative due to political support at various levels, an infrastructure and legislative environment that continuously attracts investments, as well as its strategic location which enables all countries to benefit from the Islamic investment services it offers."