Bank Muscat’s sukuk issue expected this month, says official

Business Sunday 12/March/2017 17:43 PM
By: Times News Service
Bank Muscat’s sukuk issue expected this month, says official

Muscat: An Islamic bond issue to raise OMR23-30 million, which is the first tranche of Meethaq’s OMR100 million-sukuk programme, will be floated towards the end of this month, a senior official at Bank Muscat told Times of Oman.
Meethaq is Bank Muscat’s pioneer Islamic banking window in Oman.
The bank has already received an initial approval from stock market regulator Capital Market Authority (CMA). “We are waiting for a final approval for the prospectus (from CMA). Once that is approved, we will come out with the issue. Before the end of this month, the issue will be floated,” said Sulaiman Al Harthy, deputy chief executive officer – Islamic Banking – at Bank Muscat.
“The sukuk programme will start with a small amount, maybe (some) OMR25-30 million. We are testing the market to see the market appetite. Then we will come out with the second tranche,” added Al Harthy.
The sukuk issue offers an assured return to the investors, but Al Harthy declined to comment on the rate of return.
The sukuk instrument will be listed on the bond and Sukuk market of Muscat Securities Market (MSM), thus offering liquidity.
Al Harthy also noted that this year, Islamic financial institutions are expected to grow at a similar rate as seen last year.
“The challenges we face as Islamic banks are not different from challenges faced by conventional banks. Deployment of funds is an issue that everybody has to deal with. You have to find the right areas for deploying funds,” noted Al Harthy.
Meethaq Islamic financing receivables rose to OMR855 million by end-December 2016, compared to OMR635 million in the same period in 2015. Likewise, Islamic banking customer deposits amounted to OMR763 million by end-December 2016, compared to OMR625 million reported during the same period in 2015.