Dubai: The Government of Hong Kong has announced plans to list its first offering of $1 billion (Dh3.68 billion) sukuk on Nasdaq Dubai.
Dubai Crown Prince and Chairman of the Executive Council Shaikh Hamdan Bin Mohammad Bin Rashid Al Maktoum welcomed the decision to list the Hong Kong sukuk on Nasdaq Dubai.
“Choosing Nasdaq Dubai as a platform to list the world’s first US dollar sukuk issued by a AAA-rated government falls in line with the initiative launched by UAE Vice-President, Prime Minister and Ruler of Dubai His Highness Shaikh Mohammad Bin Rashid Al Maktoum to position Dubai as the centre of the Islamic Economy,” Shaikh Hamdan said.
The Dubai Crown Prince welcomed the successful launch of the sukuk. “We are also pleased to have worked with Hong Kong on this important issue and delighted that it has attracted such strong demand. We look forward to closer working relations with Hong Kong in developing global Islamic financial products,” Shaikh Hamdan added.
The step further highlights Dubai as one of the most important platforms for trading Sharia-compliant financial products.
By the end of the first half of 2014, the total value of Sukuk listed on Dubai’s exchanges was close to $22 billion, out of this Nasdaq Dubai alone accounted for more than $18 billion. Currently Dubai is the world’s third largest venue for sukuk listings by value.
Credit rating agency Moody’s estimates global sukuk issuance this year will exceed the 2013 level to reach around $70 billion, with sovereign issuance increasing to around $30 billion.
According to Standard & Poor’s, although corporate and infrastructure issuance has faltered so far this year, a healthy increase in government and financial institution issuance has more than compensated for the drop.
Majority of recent sukuk issuances from the GCC region have been from government-related borrowers. The UAE issuers collectively lead international issuance globally with over $26.8 billion.
“The proportion of sukuk versus conventional issuance is rising. And similar to other GCC sovereigns, this trend is likely to continue given the Dubai government’s explicit ambition to become the centre of the Islamic Economy” said Khalid Howladar, Moody’s Global Head for Islamic Finance.