Latest news with #IslamicFinance
Arabian Business
a day ago
- Business
- Arabian Business
UAE raises $300m in June 2025 Islamic T-Sukuk auction, oversubscribed 5.6 times
The UAE Ministry of Finance (MoF) has announced the successful completion of its June 2025 auction of Islamic Treasury Sukuk (T-Sukuk), raising AED1.1bn ($300m) as part of its broader 2025 issuance program. The auction, conducted in coordination with the Central Bank of the UAE (CBUAE), drew strong demand from eight primary dealers, reflecting continued investor trust in the UAE's fiscal framework and Islamic finance model. The auction results highlighted competitive, market-driven pricing with a Yield to Maturity (YTM) of 3.88 per cent for the May 2027 tranche and 3.83 per cent for the August 2028 tranche. Islamic Sukuk in UAE These yields represent a tight spread of 2 basis points, above comparable US Treasuries at the time of issuance. The tight spreads and high participation signal market-driven pricing and growing demand for Shariah-compliant sovereign debt instruments. The Ministry confirmed the auction aligns with its commitment to developing a dirham-denominated yield curve and broadening local capital markets, offering investors a stable and secure platform within the country's economic ecosystem. In a statement, the MoF reiterated that the Islamic T-Sukuk programme:
Mail & Guardian
a day ago
- Business
- Mail & Guardian
Standard Bank launches Southern Africa's first Shari'ah-compliant overdraft
Africa's biggest lender, Standard Bank, has launched the first-ever Shari'ah-compliant overdraft facility in Southern Africa, marking a transformative milestone for Islamic Finance on the continent. Designed to empower business owners with more Shari'ah-compliant solutions, the product adds to a long list of Standard Bank's innovative solutions to meet the unique needs of Africa's growing demand for Islamic Finance. Structured under the Shari'ah principle of Wakaalah, the Shari'ah Overdraft facility is a non-interest based alternative that provides businesses with instant access to short-term funding. Linked to the Shari'ah Business Current Account, the new product will allow clients to drawdown up to a pre-approved limit. 'This is not just a product launch, it's a response to a critical gap in Africa's Islamic Finance ecosystem,' said Ameen Hassen, Head of Shari'ah Banking at Standard Bank. 'For too long, businesses that required Shari'ah-compliant financing options lacked fluidity of a working capital solution that an overdraft brings. This overdraft facility empowers entrepreneurs to manage cash flow fluctuations without compromising their values and need for Shari'ah compliance.' With Sub-Saharan Africa home to 18% of the global Muslim population but accounting for just 1% of worldwide Islamic Finance assets, Standard Bank's innovation arrives as the region seeks scalable, Shari'ah-compliant solutions. The overdraft facility will directly address working capital challenges faced by businesses. Key benefits of the new product include: Competitive market related pricing. Direct linkage to the Shari'ah Business Current Account for streamlined operations. Certified compliance: The facility is certified by Standard Bank's Shari'ah Advisory Committee. Not only for Muslims While Shari'ah Banking adheres to Islamic principles like Wakaalah bi al-Istithmar (agency-based investment), and the prohibition of interest (riba), Hassen said the bank's offering transcends religious boundaries, with approximately 35% of Standard Bank's South African Shari'ah clients identifying as non-Muslim. 'This isn't just for Muslims, it's for anyone seeking transparent, non-interest, asset-based or backed financial solutions,' said Hassen. The launch builds on Standard Bank's legacy of Islamic Finance innovation, including the world's first Shari'ah-compliant Diners Club product and South Africa's inaugural Shari'ah tax-efficient endowment. 'Africa's economic future hinges on inclusive, innovative finance,' said Hassen. 'With this product, we're not just serving clients, we're innovating, industrialising and advancing a system of finance rooted in tradition and shared prosperity.' To leverage this Shari'ah-compliant liquidity facility, businesses and individuals can contact their Standard Bank Relationship Manager or email
Khaleej Times
2 days ago
- Business
- Khaleej Times
Global sukuk market increasingly becoming attractive for mainstream investors
At $930 billion in size, the market for sukuk – often described as the Islamic world's equivalent to bonds – is becoming increasingly difficult for mainstream investors to overlook. While sukuk-focused funds remain small, with just $5.8 billion in assets under management, the space has seen notable developments in recent years, including the rise of passive ETFs, a study showed. While the sukuk market grew to $930 billion in outstanding securities by the end of 2024 (up from $863 billion in 2023), the market for funds investing in sukuk is tiny by comparison, data from Morningstar shows. Sukuk funds totalled $5.8 billion in assets in May 2025 (up from $5.0 billion a year earlier). Islamic banks dominate sukuk ownership, resulting in a market characterized by shallow trading and low liquidity. The market for sukuk funds aimed at global investors includes a small but growing cohort of both passive and active options. Fees for passive sukuk ETFs, which largely focus on the investment-grade market, fees range from 0.35 per cent to 0.50 per cent (reasonable, though higher than comparable bond options). Fees for US dollar-denominated actively-managed sukuk funds average 1.34 per cent (pricey compared to conventional global diversified or emerging-markets bond funds). Active sukuk funds often have more room to boost yields by investing in riskier, below-investment-grade issuers. 'As the global sukuk market expands, its relevance and appeal to investors seeking Shariah-compliant options have grown. Still, the market's concentration in specific geographies and heavy exposure to a few issuers makes it less suitable as a long-term core allocation compared to more diversified conventional bond strategies. However, for investors restricted to Shariah-compliant vehicles, the range of both active and passive sukuk funds is widening. Sukuk have not been immune to short-term volatility as geopolitical risks exploded in the Middle East in 2025, but many sukuk managers argue that issuers in the region retain strong fundamentals, and that credit deterioration should be fairly contained,' commented Shannon Kirwin, Principal, Fixed Income Ratings at Morningstar. The sukuk market's infrequent trading and largely buy-and-hold investor base have yielded a key benefit for sukuk investors: historically lower price volatility compared to conventional bonds. However, this feature could diminish if funds become a more meaningful portion of the market – and it should not be mistaken for a lack of credit risk. Standards boards, particularly the Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAIOFI) and the Malaysia-based Islamic Financial Services Board (IFSB) play important roles in establishing and maintaining norms in the sukuk market. Currently, the AAIOFI is considering tightening its standards for the treatment of asset-based sukuk (its upcoming Standard 62), which some observers worry could prove disruptive to the market. Fund managers and experts who spoke with Morningstar for this paper, however, expressed optimism that the board would ultimately err on the side of preserving market stability. Despite its lower price volatility, the sukuk market's strong geographic skew towards a few regional markets (Gulf countries dominate hard-currency issuance while Malaysia dominates local-currency issuance) makes the asset class less suitable as a core portfolio building block for conventional investors than a diversified global bond allocation, analysts say. However, for Muslim investors otherwise unable to tap fixed-income funds, the sukuk market offers a compelling solution.
Zawya
2 days ago
- Business
- Zawya
UAE: Islamic Treasury Sukuk auction attracts bids worth $1.7bln
The Ministry of Finance (MoF), in its capacity as the issuer and in collaboration with the Central Bank of the UAE (CBUAE) as the issuing and payment agent, announced the successful completion of the June 2025 auction of UAE Dirham-denominated Islamic Treasury Sukuk (T-Sukuk) amounting to AED1.1 billion. This issuance forms part of the T-Sukuk issuance program for the year 2025, as published on the MoF's official website. The auction attracted robust demand from eight primary dealers across both tranches maturing in May 2027 and August 2028. The total bids received reached AED6.21billion, reflecting an oversubscription rate of 5.6 times, underscoring the strong confidence of investors in the UAE's creditworthiness and Islamic finance framework. The auction results highlighted competitive, market-driven pricing with a Yield to Maturity (YTM) of 3.88% for the May 2027 tranche and 3.83% for the August 2028 tranche. These yields represent a tight spread of 2 basis points, above comparable US Treasuries at the time of issuance. The Islamic T-Sukuk programme plays a vital role in supporting the development of the UAE's dirham-denominated yield curve, offering secure investment instruments for a wide range of investors. Furthermore, it reinforces the local debt capital market, contributes to the development of the broader investment landscape, and supports the UAE's long-term economic sustainability and growth objectives.
Zawya
2 days ago
- Business
- Zawya
Islamic Treasury Sukuk Auction for June 2025 attracts bids worth AED6.21bln
Yield to Maturity (YTM) of 3.88% for the May 2027 tranche and 3.83% for the August 2028, with a tight spread of 2 basis points, above comparable US Treasuries at the time of issuance. Abu Dhabi, UAE: The Ministry of Finance (MoF), in its capacity as the issuer and in collaboration with the Central Bank of the UAE (CBUAE) as the issuing and payment agent, announced the successful completion of the June 2025 auction of UAE Dirham-denominated Islamic Treasury Sukuk (T-Sukuk) amounting to AED 1.1 billion. This issuance forms part of the T-Sukuk issuance program for the year 2025, as published on the MoF's official website. The auction attracted robust demand from eight primary dealers across both tranches maturing in May 2027 and August 2028. The total bids received reached AED 6.21billion, reflecting an oversubscription rate of 5.6 times, underscoring the strong confidence of investors in the UAE's creditworthiness and Islamic finance framework. The auction results highlighted competitive, market-driven pricing with a Yield to Maturity (YTM) of 3.88% for the May 2027 tranche and 3.83% for the August 2028 tranche. These yields represent a tight spread of 2 basis points, above comparable US Treasuries at the time of issuance. The Islamic T-Sukuk program plays a vital role in supporting the development of the UAE's dirham-denominated yield curve, offering secure investment instruments for a wide range of investors. Furthermore, it reinforces the local debt capital market, contributes to the development of the broader investment landscape, and supports the UAE's long-term economic sustainability and growth objectives.
