Malaysia and the Middle East to dominate Islamic leasing
The Securities Commission Malaysia announced an 11.9% growth for their capital market last year which included 38% in worldwide Sukuk issuances. This is good news for the Islamic leasing sector on both fronts. One of the frontrunners is OSK Holdings with a new plan to set up a RM1.8 billion (US$462.47 million) Islamic medium term note program.
The global Islamic debt capital market is extremely important to Islamic leasing. The Middle East is continuing to push forward and gain momentum in this market. There are a growing number of Gulf-based corporate entities that have announced an interest to borrow capital using Islamic Leasing an financing methods.
Several large companies have announced plans to print Sukuk papers and out of these, two noteworthy firms are from Saudi Arabia: the IDB and Dar Al Arkan Real Estate Development. The UAE’s Emirates is also doing its part when it comes to Islamic leasing by announcing a price guidance for an Islamic facility in the high range of 4%. The recent Turkish treasury meeting resulted in interesting developments in the Islamic leasing sector with plans to develop a central Islamic advisory board. Turkey is looking to place Shariah compliant leasing regulations in some sections of the banking and insurance industry.
Tajikistan is ready to launch an Islamic banking system sometime this year. This is seen as a logical move after Senegal and Algeria moved toward an Islamic leasing structure earlier in 2018. What makes this particular move so interesting is the fact that the brand-new framework would focus on licensing Islamic credit organizations. Obviously, this means they will be more Shariah compliant and in line with other Islamic leasing structures already in place. Tajikistan plans to have its first Islamic bank up and running later this year.
The Dubai Gold & Commodities Exchange is moving closer to becoming an Islamic leasing type of exchange platform. In fact, by announcing that its spot gold contract started trading at he end of last month, INTL FC Stone signaled a move toward Islamic Financing products.
Finally, it would seem that Islamic leasing efforts are also using more traditional banking names. For example, the Qatar Central Bank is putting together a three-way merger that would result in the second-largest bank in Qatar. JPMorgan has been appointed to oversee the process and put together the necessary studies. The merger would involve Barwa Bank, Masraf Al Rayan and International Bank of Qatar.
Shoeb M Sharieff is the president and CEO of
Ijara Community Development Corp. He can be contacted at shoeb@ijaracdc.com
