https://arab.news/9npd3
RIYADH: Global financial experts called for a scientifically guided approach to managing the risks associated with sukuk transactions during a meeting in Cairo on Sunday.
This event, held under the theme “The Importance of Strengthening the Role of Sukuks in Sustainable Development: Presentation and Analysis of International Experiences,” was organized by the Arab Administrative Development Organization in partnership with the Albaraka Forum for Islamic Economy and the Egyptian Islamic Finance Association.
The Saudi Press agency reported that the discussions convened industry leaders to explore how a bond adhering to Islamic finance principles can power investments in sectors aligned with sustainability objectives.
It focused on the dynamic role of sukuk in adapting to this evolving landscape.
Participants emphasized the necessity of providing an information base concerning sukuk-related investment opportunities, market conditions and the status of companies to facilitate investors in making decisions.
Moreover, they advocated for establishing a comprehensive plan to train and enhance the qualifications of professionals, equipping them with the requisite experience, skills and knowledge related to sukuk, spanning law, economics and financial accounting.
The speakers underscored the importance of regulatory and legislative frameworks for overseeing sukuk issuance and standardizing their transactions to boost stakeholder confidence.
Participants also highlighted the significance of forming cooperation agreements with bodies that support and oversee sukuk to expand industrial and green finance projects.
Efforts to create a transparent and well-governed Islamic financial market capable of efficiently mobilizing and allocating financial resources, thus expanding the customer base and attracting investors, were recommended.
They suggested implementing an integrated and suitable legislative and regulatory framework to provide legal protection, including tax benefits on returns from sovereign sukuk.
In September, Moody’s Investors Service noted that issuing Shariah-compliant bonds in the first half of 2023 declined 28 percent to $66 billion, compared to $92 billion in the same period of the previous year.
This fall is due to muted activities in key countries, including Saudi Arabia, Indonesia and Turkiye, amid robust commodity prices.
“In the GCC (Gulf Cooperation Council) and Southeast Asia, robust commodity prices associated with sustained economic growth have translated into stronger fiscal positions and lower issuance needs,” said Moody’s in the report.