News | Wednesday, 22 April 2009

Corporate Sukuk with new opportunities of financing capital requirements for Maltese businesses

In the coming weeks, Malta will be explored by a large institution for its potential to the introduction of the Sukuk. The institution will also meet anyone interested in alternative financing.
Sukuk may be an ideal instrument for various enterprises in Malta. Companies in Malta have traditionally looked for bank financing in view of the lack of other ways to finance operations. Larger companies have also issued corporate bonds. When the MFSA and the Commissioner of Inland Revenue will put forward to parliament the proposal for the necessary legislative changes in order not to discriminate any longer against Islamic Financial Structures, enterprises in Malta will have the opportunity to tap into other sources of financing, including Sukuk.
The Sukuk market is continuing to gain pace. Enterprises around the globe are becoming all the more interested in this double dip opportunity afforded by a financing product appealing to the conventional investors as well as enticing the participation of the vast wall of liquidity latent in the Islamic financial Community.
In spite of what many think, Sukuk is not a debt instrument. It represents a proportional beneficial ownership in the assets underlying the issue. The Sukuk holder has right to receive its portion of the income stream from the underlying asset. Another way of looking at Sukuk is as a capital markets overlay to an underlying Islamic structure. To this regard, it is clear that for a corporate to consider issuing a Sukuk it must be able to satisfy essential criteria in relation with Shariah Principles.
Islamic Finance is one of the most exciting areas of the capital markets nowadays. The Gulf countries have brought Islamic Finance to the forefront of the International Finance Community.
Any organisation interested in participating in an information session being organised with the visiting institution or in having one to one meetings are invited to send an email to Reuben Buttigieg on [email protected]


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22 April 2009

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