Looking forward to making Kuwait a global hub for sukuk issuing and marketing

Deal paves way for other issuances in African market

Chairman of the Board of Directors at Kuwait Finance House (KFH) Hamad Abdul-Muhsen Al-Marzouq said “as KFH leads debut USD 500 mln sovereign sukuk issuance for the Republic of South Africa through its investment arm KFH-Investment, it confirms leadership and robustness, not to mention capability to open new markets and Attract clients to sukuk market, whether governments or companies”.

He added, in a press statement, that the republic of South Africa is seen as one of the most significant countries that are transforming issuing conventional bonds into sukuk as sharia-compliant alternative that contributes to diversifying financing resources at the level of the African continent, given the position occupied by the South African economy and the good relationships with adjacent countries.

Al- Marzouq went on to say that in addition to leading and promoting sukuk issuance, KFH contributed to offering technical support and extensive experience that enabled the government of South Africa to amend some laws and regulations to be allowed to issue sukuk and take all approvals.

He expressed confidence in the good impact it left through the construction of the legislative structure, which allows issuing more sovereign sukuk in South Africa or other countries of the continent, or through the great success by 4-time oversubscription, where order book was about USD 2 bln from 130 regional and global accounts.

Al-Marzouq explained that KFH succeeded in posting 4-time oversubscription as part of sukuk issuance marketing. He indicated that meetings were held with investors in Europe, Asia and the Middle East in collaboration with the "BNP Paribas", and "Standard Bank". Also, representatives of the republic of South Africa focused in their sukuk promotional campaign in the GCC countries, on UAE, KSA, and Qatar that acquired more than 50% of the total sukuk value.

He said that as high qualified human resources and solvency that can achieve goals are available, KFH is looking forward to making Kuwait a global hub for issuing and marketing sukuk, not to mention a global financial center to provide the infrastructure for such outstanding product that enjoys global praise and significant expansion.

Moreover, Al-Marzouq noted that the sukuk issuance for South Africa is a debut sovereign sukuk at the level of the continent, and the third of its kind for non-Muslim countries after the sukuk issued by the United Kingdom and lately Hong Kong. It’s worth noting that the sukuk issuance was granted credit investment rating by the global rating agencies Moody’s, Fitch and  Standard Poor’s, where they will be enlisted in the market of the Luxembourg Stock Exchange with a period of 5 years and 9 months and expected return of about 3.9%.

It’s worth mentioning that KFH participated in arranging USD 750 mln debut sukuk for the emirate of Sharjah where the sukuk witnessed 10-time oversubscription as order book was about USD7.8 bln from 250 accounts which reflects the growing interest in Islamic finance as a source of sovereign funding.