The UAE is issuing 1.1 billion dirhams worth of Islamic treasury bonds

The UAE, represented by the Ministry of Finance as the issuer, announced the issuance of Islamic Treasury Sukuk “T-Sukuk” denominated in local currency Dirhams, with a bid size of up to 1.1 billion dirhams.

And the ministry said in a statement yesterday that it is cooperating with the UAE Central Bank as the issuing and paying agent for its issuance.

pieces

The Islamic treasury, denominated in the local currency dirham, will initially cover tenures varying between two, three and five years, and will later offer a 10-year tranche, all of which will support ventures. Creating a bond market in the local currency and generally creating a yield curve over the medium term.

Best practices

The Ministry of Finance and the Central Bank will work with all relevant government agencies and international financial institutions to ensure the adoption and application of best international practices in structuring these sukuk, allowing for further development of Islamic finance in the country. Enhancing the country’s vision as an international hub for Islamic economics.

The Islamic Sukuk framework was approved by the Supreme Shariah Authority of the Central Bank of the United Arab Emirates, which aims to standardize and harmonize the practices of Islamic financial institutions, by collaborating with internationally recognized Shariah standards and best practices. Officials concerned.

Agent Banks

The Ministry of Finance has released a key index for agency banks, which include eight banks: Abu Dhabi Islamic Bank, Dubai Islamic Bank, Abu Dhabi Commercial Bank, Emirates NBD, First Abu Dhabi Bank, Mashreq Bank, HSBC Bank and Standard Chartered. Islamic Treasury Sukuk «T-Sukuk» is the primary distributor to participants in the primary auction and is responsible for the development of the secondary market.

Financial certificates

Mohammed bin Hadi Al Husseini, Minister of State for Financial Affairs, affirmed the UAE’s interest in developing the Islamic economy and establishing an investment framework that guides the Islamic economy as one of the pillars of the local economy.

Al-Husseini said: “The Ministry of Finance, led by the Central Bank of the United Arab Emirates, cooperates with all its partners to attract investments and use them in the channels of the Islamic economy, as the Islamic treasury complies with the Sukuk financing certificates. Islamic laws favor diversification and trade to reflect local returns on investment. “Economic and financial inclusion, as well as contributing to the achievement of the goals of comprehensive and sustainable economic and social development.

He noted the role of Islamic sukuk in creating a local currency sukuk market, diversifying funding sources, revitalizing the local finance and banking sector, as well as providing safe investment alternatives to local and foreign investors and creating a yield curve in UAE dirhams. , which improves the local financial market and the investment climate in general.

Global Center

For his part, Emirates Central Bank Governor Khalid Muhammad Balamah stressed the importance of offering Islamic treasury sukuk in supporting investment options and compatible alternatives in developing local sukuk markets, diversifying funding sources and strengthening infrastructure. The rules of Islamic Shariah, improving the investment environment to contribute to the development of Islamic finance and cementing the UAE’s position as a leading global center in Islamic finance.

Palama said, “Islamic treasury sukuk issuance falls within the framework of the UAE’s commitment to improving capital market operations and cementing its position as a global financial center, as the issuance confirms the strength and stability of the financial system and local confidence. And international investors in the UAE’s ability to respond to monetary policies and Financial sector can be developed according to strategic plans ».

Competition

He added, “By developing an effective infrastructure for financial markets, we believe this issue will contribute to supporting the market for bonds denominated in the local currency and issued by the public sector in the country, and this will increase competitiveness. Local financial markets, and dealers in the country help maintain a single, transparent and diversified group. “This will contribute to the implementation of a new monetary framework for the dirham, and support ongoing work to establish a risk-free pricing (yield curve) in dirhams, which will stimulate more local market activity to support the sustainability of the country’s economic growth.

Approval of sukuk structure by the Supreme Shariah Board with the aim of standardizing and harmonizing the practices of Islamic financial institutions.