IFN Publication: Muscat Securities Market releases Q2 2018 Shariah-compliant stock index

1. 21©
5th
December 2018
IFN SECTOR
CORRESPONDENT
IFN COUNTRY
CORRESPONDENT
OFFSHORE CENTERS
By Manuela Belmontes
The Sukuk markets have continued
at a steady pace for offshore centers,
with the Cayman Islands maintaining
its position as the domicile of choice
for international Sukuk issuances.
October saw the successful closings and
launches of multiple Sukuk issuances
based in the Cayman Islands and the
trend is likely to continue.
Aldar Properties and Tilal Development
Company both issued Sukuk this past
month, with both electing to domicile
their issuer companies in the Cayman
Islands.
Aldar Properties has reported that
its 100%-owned subsidiary, Aldar
Investments, successfully issued its debut
fixed rate US dollar-denominated Sukuk,
with a tenor of seven years, raising a total
of US$500 million. The Sukuk issuance
was the first of its kind to be issued by an
Abu Dhabi corporate entity since 2013,
benefiting from strong regional Islamic
demand as well as international interest,
which enabled the issue to be more than
twice oversubscribed. This issuance was
also notable as it was the first corporate
Sukuk to be listed on the Abu Dhabi
Securities Exchange. Aldar utilised a
Cayman Islands-based issuer company
for the Sukuk paper, which was also
listed on the Irish Stock Exchange.
Tilal Development Company, a property
developer based in Oman, has also been
reported to have issued US$137 million-
worth of Sukuk. The Sukuk issuance is
reported to have a tenor of five years
and to utilize an Ijarah structure and a
Cayman Islands domiciled issuer.
Islamic Finance news and other outlets
have also reported the issuance of Sukuk
by Jabal Omar Development Company,
one of the largest developers in the
Kingdom of Saudi Arabia.
We reported in the last quarter on an SPV
formed in the Abu Dhabi Global Market
(ADGM) being used in connection
with Sukuk issued for the purposes
of aviation finance. We anticipate that
this will become popular with the Abu
Dhabi-based corporates and government
entities looking to issue Sukuk and we
have now seen several corporate services
providers establish a presence in the
ADGM to service the demand.
The latest corporate services provider to
announce its presence in the ADGM is
MaplesFS. Already the largest corporate
services provider in the Cayman Islands
with an office in Dubai, it has now
opened an office in the ADGM to provide
incorporation and corporate services for
ADGM companies. The arrival of
established and respected corporate
services companies in the ADGM will
assist corporates looking to use ADGM
structures for Islamic finance transactions
and enhance the reputation of the ADGM
as a credible alternative to the traditional
offshore centers.
Manuela Belmontes is a partner at Maples
and Calder (Dubai). She can be contacted at
manuela.belmontes@maplesandcalder.com.
OMAN
By Dhana Pillai
The Muscat Securities Market (MSM)
periodically reviews the financial and
business activity of companies whose
stocks are listed on the secondary
market of the Shariah compliant stock
index and makes changes to the index
by removing the non-Shariah compliant
stocks from the list. The MSM has
issued the second quarter (Q2) index
that includes 31 companies that meet
the criteria set by AAOIFI.
The index has not changed from the first
quarter (Q1) results except that Voltamp
Energy does not appear on the list. The
Q2 index includes Alizz Islamic Bank,
Bank Nizwa, Oman Oil, Ooredoo, Shell
Oman, A’Saffa Foods and Salalah Port
Services among other public joint stock
companies.
The MSM regularly updates the list
based on the accepted standards of
AAOIFI to enable and encourage Muslim
investors to invest in stocks listed for
trading, which otherwise in a strict
construction, is viewed as trading in
speculative activities. The MSM usually
reviews the financial standards such as
debt levels, cash and receivable levels
of these companies, among others, to
determine the companies’ compliance.
Islamic banks in Oman
provide inancing
According to a bulletin published by the
Central Bank of Oman, the Islamic banks
have provided financing to the extent
of OMR3.4 billion (US$8.81 billion) as
of the end of August 2018, recording an
increase of 17.2% from a year ago. Total
deposits held with Islamic banks and
windows also registered a significant
increase to OMR3.1 billion (US$8.03
billion) in August 2018 from OMR2.8
billion (US$7.26 billion) as of the end of
August 2017.
Total assets of Islamic banks and
windows combined amounted to
OMR4.2 billion (US$10.88 billion) as of
the end of August 2018, increasing their
share to 12.7% of banking system assets.
Meethaq launches biometric
authentication
Meethaq has launched its mobile banking
application which allows users to log in
in a safe and convenient manner by using
their fingerprint and face ID and the
application has been made compatible
with the newer generation of
smartphones.
Dhana Pillai is the head of real estate, tax
and project finance at Al Hashmi Law Firm
(Oman). She can be contacted at dhana.
pillai@ohlaw.net.
Muscat Securities Market releases Q2 2018 Shariah compliant
stock index
A steady Sukuk market for offshore centers