Business News
Singapore to issue Islamic-compliant investment instruments
Nov 24, 2008, 8:11 GMT
Singapore - Singapore is setting up a 'sukuk' issuance to provide sharia-compliant regulatory assets to financial institutions to promote the growth of Islamic finance in the city state, the Monetary Authority of Singapore (MAS) said in a statement Monday.
MAS managing director Heng Swee Keat said the sukuk structure was to be based broadly on the al-Ijarah structure, or the sale-and-lease back of an underlying property.
The issues would be given equal regulatory treatment as Singapore Government Securities (SGS) and returns would be tied to the risk-free yield of SGS of equivalent tenor.
'The facility is open to all financial institutions that plan to or are currently carrying out Shariah compliant financial services in Singapore,' said Heng at the 15th World Islamic Banking Conference in Bahrain on Monday.
'We are issuing on a reverse-enquiry basis, which means we can size and time the issuance according to the needs of the financial institutions,' he added.
'A number of financial institutions have already expressed interest and we expect the first issue to take place at the start of next year,' he said.
The sukuk initiative was first announced at the 5th Islamic Financial Services Board Annual Summit held in Jordan in May 2008.
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