The Capital Market Authority (CMA) in collaboration with Amanie Advisors had organized a seminar on “Sukuk: From Niche To Mainstream” on Thursday, 8^th May 2014 at the Businessmen Hall, Capital Market Authority Building, Ruwi.

The seminar was organized with the objective to create more awareness and to educate the capital market industry. This is in line with the CMA’s overall strategies and masterplan to comprehensively develop the Islamic capital market in the Sultanate of Oman, in tandem with His Majesty Sultan Qaboos Bin Said’s vision to develop the overall financial market and economy of the country.

The seminar had touched on the following topics, “Sukuk and Islamic Capital Market: A Global Perspective” and “Sukuk vs Conventional Bonds: A GCC Experience”.

The distinguish speakers included:

• Sheikh Dr. Mohd Daud Bakar – a prominent global Shariah scholar and founder of Amanie Advisors. Dr. Daud is currently the Chairman of the Shariah Advisory Council at the Central Bank of Malaysia, the Securities Commission of Malaysia and the Labuan Financial Services Authority in Malaysia. He is a Shariah board member of various financial institutions and companies, including the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) (Bahrain), The International Islamic Financial Market (Bahrain), National Bank of Oman, Al Madina Takaful, Morgan Stanley (Dubai), Bank of London and Middle East (London), amongst many others. He is also a Shariah board member for Tilal Development Company’s 1^st sukuk issuance in Oman. Dr. Daud has advised nearly 350 Sukuk in various capacities.

• Mr. Lim Say Cheong – Executive Vice President & Head of Investment Banking, Al Hilal Bank UAE (owned by the Abu Dhabi Government). Mr. Lim has more than 20 years of banking experience including Islamic finance and banking. His banking experience includes Treasury, Risk Management, Asset Management and Investment Banking. During this time, he has worked in Singapore, Kuala Lumpur, Dubai and Abu Dhabi.

The seminar highlighted the global rapid and continuing growth that has been seen in Islamic finance, the Islamic capital market and the Sukuk market over the last 20 years, from just a small and niche market, to becoming part of the mainstream global financial system. It also touched on some of the Sukuk structures, its impact and role in economic growth and development, and practical case studies. The speakers had also highlighted the advantages of issuing a Sukuk versus conventional bonds due to the wider investor base, improved pricing dynamics and stable secondary market performance.

In Oman’s case, within a short span of less than 1.5 years, Islamic banking and finance has emerged as one of the fastest growing segments within the financial services industry in Oman since the issuance of the Islamic Banking Regulatory Framework on 18 December 2012 and the establishment of 2 new dedicated Islamic banks and 6 Islamic banking windows.

Since then, 3 Shariah funds had been launched, a corporate sukuk had been issued, the new MSM Shariah Index was launched for the Muscat Securities Market, 2 new Takaful operators are currently operating in the market and the proposed issuance of the 1^st Omani sovereign sukuk soon.

Based on what has been seen thus far, Islamic banking and the Islamic capital market will play a key role in meeting the funding requirements of the country and growth in the economy, including for the SMEs.

Islamic finance, based on principles and values that are universally-accepted, offers a viable alternative to conventional finance, which has been widely affected by the recent global financial crisis and the current economic turmoil in some of the industrialised nations.

As a result, remarkable global interest has been witnessed towards Islamic finance and the Islamic capital market among diverse groups of stakeholders, including large conventional-based multinational institutions – not only to offer Islamic financial services, but also to issue, as well as, subscribe to Shariah-compliant products.

As more jurisdictions and players participate in the industry, the Islamic capital market is expected to contribute to a more efficient mobilisation and allocation of funds across regions, thus strengthening international financial and economic linkages between jurisdictions and bringing mutual benefits to all stakeholders.

The Sukuk segment plays a key role in the development and internationalisation of the Islamic capital market as it is an important avenue for domestic and international fund raising and investment activities, especially for infrastructure projects, generating significant cross-border flows and foreign investments.

In addition, as a portfolio investment instrument, sukuk – given its strong potential for further growth in issuance – also augurs well for the Islamic fund management industry as it helps to broaden and deepen the product range in which fund managers can invest.

Providing underlying support for the development of these products is the growing affluence of the population in the emerging economies which include some of the highly-populated Muslim-majority countries that will drive demand for more Shariah-compliant investments.

In view of this, the Islamic finance and Islamic capital market industry is well placed to seize the opportunities available today to make significant headway towards mainstream finance.