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Nasdaq Dubai, a Dubai-based stock exchange, said on Tuesday that it welcomes the listing of a $600 million sukuk by the Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank (IsDB).

According to a statement the Jeddah, Saudi Arabia-based ICD sent to Financial Nigeria, its sukuk was listed on Nasdaq Dubai on October 15, 2020. The non-interest, Sharia-compliant bond has a tenor of five years and was issued at 140 basis points (bps) over the mid-swaps rate.

Sukuks are Islamic financial instruments for raising long-term financing, without yielding interest for the sukuk holders. A sukuk holder is only entitled to a share in the revenues generated by the project or asset tied to the sukuk.

According to Fitch Ratings, the volume of outstanding Fitch-rated sukuk at the end of Q2 2020 reached $114.5 billion globally, out of which about 25 per cent is estimated to mature in 2020-2022. ICD said the new listing reinforces Dubai’s role as one of world’s leading sukuk centres, bringing the total value of sukuk listed in Dubai to $74.05 billion.   

ICD said the $600 million sukuk issuance is its second following a $300 million issuance in 2016, which was also listed on Nasdaq Dubai. The latest sukuk was oversubscribed by almost three times, including orders from the Joint Lead Managers (JLMs). The investor order book shows the issuance was allocated to investors in Europe, Asia and the Middle East, with 4 per cent of the issuance allocated to investors in UK/Europe, 21 per cent to Asia, and 75 per cent to the Middle East.

“We received strong investor interest in our new Sukuk issuance from a wide range of constituencies, including fund managers, commercial and private banks and central banks – demonstrating their confidence and support for ICD’s strategy and initiatives in promoting private sector activity,” said Ayman Sejiny, Chief Executive Officer of ICD. “ICD’s Sukuk listing on Nasdaq Dubai, as the region’s international exchange, provides the Sukuk with excellent links to regional and international investors on a well-regulated platform attracting global visibility.”

The capital raised from the sukuk will be used to support private sector activities within the 55 member countries of the multilateral financial institution. ICD said its wide-ranging development activities in its member countries include creating employment opportunities, strengthening their export potential, and encouraging the development of Islamic financing activities.

Speaking on ICD’s new sukuk listing, Abdul Wahed Al Fahim, Chairman of Nasdaq Dubai, said, “This new listing by a prominent multilateral entity adds further momentum to the growth of Dubai as the global capital of the Islamic Economy, under the initiative launched by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President and Prime Minster, and Ruler of Dubai.”

Majority-owned by Dubai Financial Market (DFM), Nasdaq Dubai is one of three stock exchanges in the United Arab Emirates (UAE) – the others DFM and Abu Dhabi Securities Exchange (ADX), which both list mostly UAE equities. Using the international Nasdaq brand name, Nasdaq Dubai was set up to trade international stocks.

“Our growing relationship with the multilateral IsDB Group demonstrates our commitment to serving Sharia’a-compliant issuers based regionally and internationally, providing an effective and high-profile listing platform,” said Hamed Ali, Chief Executive of Nasdaq Dubai and Deputy Chief Executive of DFM.