Published 17 Nov,2020 via Muscat Daily - On November 10, the sultanate’s Ministry of Finance announced a RO25mn sukuk issuance, the government’s first sukuk issuance available to retail investors.
The Omani government’s recently announced sukuk issuance for retail investors is credit positive for the sultanate’s Islamic banks and Islamic banking windows of conventional banks, Moody’s Investors Service said on Monday.
On November 10, the sultanate’s Ministry of Finance announced a RO25mn sukuk issuance, the government’s first sukuk issuance available to retail investors.
‘The issuance is credit positive for Oman’s Islamic banks and conventional banks’ Islamic windows. The government’s issuance of sukuk to retail investors increases Islamic finance penetration and awareness among the population and provides banks with Sharia’a-compliant instruments for liquidity management,’ Moody’s said in a sector comment report.
The newly launched sukukissuance matures on November 24, 2022 and has a 4.75 per cent profit rate and minimum subscription of RO100. Once issued on November 24, 2020, the sukuk will be listed on the Muscat Securities Market for trading.
Moody’s said the demand for Sharia’a-compliant products in Oman is strong, reflecting its predominantly Muslim population. Islamic banking accounted for 14 per cent of banking assets as of September 2020, up from 2 per cent in March 2013, a year after the introduction of the Islamic Banking Regulatory Framework.
The rapid growth of Islamic banking assets in Oman has outpaced the growth in conventional assets in recent years, which reflects Islamic banking assets’ relatively recent introduction and low but increasing penetration, the ratings agency noted in the report.
Moody’s expects Islamic banking to reach 20-25 per cent of Omani banking assets by 2025.
‘For Omani banks, the growth in the country’s Islamic banking segment will contribute to asset growth and profitability, particularly in an operating environment weakened by the coronavirus pandemic, low economic growth, weak hydrocarbon prices and slowing overall credit demand,’ Moody’s said.
© Apex Press and Publishing. Provided by SyndiGate Media Inc. (Syndigate.info)
DISCLAIMER: This content is provided to us “as is” and unedited by an external third party provider. We cannot attest to or guarantee the accuracy of information provided in this article from the external third party provider. We do not endorse any views or opinions included in this article.