Qatar Faculty of Islamic Studies and Center for Islamic Economics and Finance holds successful symposium about Islamic Sukuk

Dr Hatem El-Karanshawy, Dean of QFIS, speaking at the sukuk symposium organized by QFIS

Qatar Faculty of Islamic Studies and Center for Islamic Economics and Finance holds successful symposium about Islamic Sukuk

Qatar Faculty of Islamic Studies and Center for Islamic Economics and Finance holds successful symposium about Islamic Sukuk

The Center for Islamic Economics and Finance (CIEF), part of the Qatar Faculty of Islamic Studies (QFIS) of Hamad bin Khalifa University, recently organised a successful symposium on “Sukuk from Economic, Legal, Practical and Shariah Perspectives”.

Over 180 people attended the symposium, which was opened by Dr Hatem El-Karanshawy, the founding Dean of QFIS. Dr El-Karanshawy introduced the speakers and talked about the importance of the symposium and the different themes. Mrs Bahnaz Alquradaghi, Senior Researcher at CIEF, acted as moderator for the symposium, which discussed a number of topics.

Dr Ali Alquradaghi, Sharia expert in Islamic banking, explained the importance of sukuk and the difference between sukuk, stocks, and bonds. He also discussed their Islamic legal basis, different types, and contemporary applications. Dr Alquradaghi also spoke about the financial and economic demand for sukuk, guarantees in investment sukuk, and reasons for the success of sukuk.

Dr Tariqullah, Professor of Islamic Finance at QFIS, discussed structure risk in the design of sukuk. He stated that the resilience of every structure requires that the risks involved must be properly identified and managed. In structuring sukuk, the key stakeholders can actually add to the structural vulnerabilities of sukuk products.

Dr Tariqullah defined and identified sukuk structure risks and critically discussed the role of the stakeholders in alleviating such risk. He explained that one of the most important preconditions in designing sukuk is consensus and coordination between the key players, namely, the Finance Ministers, as represented by the Islamic Development Bank, the Governor of Central Banks as represented by the Islamic Financial Services Board, Islamic bankers, sukuk issuers and investors.

He believes that differing sharia opinions among sharia scholars on Sukuk is the most important structural risk factor that may cause hindrance to the growth of the Islamic financial market.

Mr Bernard Barbour, Head of Legal and Sharia Affairs at QInvest, discussed the main contractual aspects of issuing Sukuk in Qatar. First, he explained that there are two legal systems in Qatar, namely: civil law and common law (at the Qatar Financial Centre). Then he addressed the most important topics related to sukuk such as contract law and currency issues.

He observed the lack of legislation in Qatari law regarding these matters. Next, Mr Barbour addressed the issue of late payment and explained that the courts in Qatar may not allow the imposition of additional profits or benefits in case of delay in payment, even if the parties had agreed to it. He stated that penalties and liquidated damages are subject to civil law and clarified that the set-off of obligations does not affect the rights of third parties. Mr Barbour went on to explain the force majeure conditions in Qatari law.

He addressed the impact of foreign law in cases of insolvency and liquidation, administration, and other common principles related to the enforcement of creditors ‘rights.

Mr Hussain Abdulla, Senior Associate Investment Banking and Capital Markets at QInvest, spoke about the reasons why we need sukuk, including the increased liquidity of Islamic and conventional banks in the GCC whose balance sheets have grown tremendously in past years. He estimated demand for sukuk from the EU to be around 20-25 per cent of global demand.

The growth of Islamic funds and insurance sectors resulted in an increase in the number of investors and the lowering of the pricing of sukuk compared to bonds. Mr Abdulla also addressed the key considerations in the process of issuing sukuk such as identifying the assets, currency and tenor of the sukuk, in addition to the Special Purpose Vehicle (SPV).

He mentioned the practical steps used for identifying assets and issuing sukuk such as planning, preparation of documentation, launching, marketing, pricing, closing and issuance. Mr Abdullah focused on the experience of the State of Qatar in issuing sukuk and explained the properties of the different tranches with tenors of five and ten years. Finally, he highlighted the characteristics of the Qatar Islamic Bank Sukuk.

The speeches were followed by an interesting discussion on the role of Sukuk in the economy and a question and answer session. Questions posed were about the legality of sukuk, the importance of laws detailed in the sukuk issuance, and the impact of the classification of sukuk in practical aspects.

The discussion was rounded off by Dr Hatem El-Karanshawy, who thanked the speakers and the attendees, and presented souvenirs to the speakers. At the end of the symposium, he said, “The subject of the symposium is a timely one because sukuk have a significant role in the financial markets. We, in the last days, have seen the British Prime Minister talking about Islamic sukuk, and we know that London is one of the most important and established global financial centres.

At the same time, it is looking for an alternative to the conventional sources of financing. Not only does it want to be a competitor, but it aspires to be the world’s leading hub for Islamic sukuk. This in itself highlights the importance of our symposium on Islamic Sukuk.”

Dr El-Karanshawy added that, “It is no doubt that this financial instrument could represent an alternative to the funding needs of Muslim countries, for example, by providing access to financing in the areas of basic industries, infrastructure, and so on. They have been used in the past by countries such as Germany, Malaysia and the United Arab Emirates, and they are increasingly being discussed in European countries.”

Dr Hatem El-Karanshawy, the founding Dean of the Faculty of Islamic Studies said, “More focus on this tool may help develop new sukuk structures that are more consistent and meet the needs of governments. They can provide a means of savings and at the same time a means of alternative financing.”

http://www.albawaba.com/business/pr/qatar-faculty-islamic-studies-533114

Qatar to emerge as major centre for Islamic finance

DOHA: The size of Qatar’s Shariah-compliant banking is expected to grow to over $100bn (QR365bn) by 2017.

Qatar to emerge as major centre for Islamic finance

Qatar to emerge as major centre for Islamic finance

 

And, given the rising global demand for interest-free financing, Qatar, Saudi Arabia and the UAE, will emerge as the major centres of Islamic finance in the coming years, said a press statement, yesterday, issued by ‘Europmoney Conferences’, a leading organiser of financial events.

The Europmoney also forecast that the growth will be largely driven by high demand for infrastructure and investment financing.

In particular, there is set to be strong demand from the government sector, which is increasingly working to ensure that at least a proportion of large project financing is structured in compliance with Shariah law.

“As the fastest-growing of the three markets, the balance sheet of Qatar’s Islamic banks are expected to be worth more than $100bn by 2017, according to a recent report by global credit rating agency Standard and Poor’s”, said the statement.

The Euromoney Qatar 2013 Conference, to be held here under the patronage of H E Abdullah bin Nasser bin Khalifa Al Thani, the Prime Minister and the Minister of Interior, from December 10 to 11 at The Ritz-Carlton, will provide a major platform for discussion of the direction of the Islamic financial sector, and the models for cooperation and competition that will help sustain it.

Co-hosted by Qatar Central Bank (QCB), the Conference will see a major presentation on “Islamic Markets and Economic Growth”, presented by Dr Khaled Al Fakih, Secretary General and CEO of The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), a Bahrain-based non-profit organisation.

It will be the first time that a representative of AAOIFI has addressed the Euromoney Conference, and reflects the growing global interest in Shariah-compliant financing and investing.

Qatar has one of the fastest-growing Islamic banking sectors in the world, driven by the demand for local credit to finance government infrastructure and investment projects.

This in turn is having an impact on the assets of Qatar’s Islamic banks, increasing their share of the country’s banking system. The Islamic banks’ market share in domestic credit increased from 13 percent in 2006, to 25 percent at the end of 2012, according to the S&P report.

Global interest in the Islamic financing sector was demonstrated in October 2013, when Britain announced that it would become the first non-Muslim country to sell a bond that can be bought by Islamic investors. Prime Minister David Cameron said that the UK Treasury is drawing up plans to issue a £200m (QR1.17bn) Sukuk, a form of debt that complies with Islamic financial law.

The new Sharia-compliant gilt will enable Britain to become the first non-Muslim country to tap the growing pool of Islamic investments, which is set to exceed $1 trillion by 2014.
The Peninsula

http://thepeninsulaqatar.com/business/260294-qatar-to-emerge-as-major-centre-for-islamic-finance.html