Securities are important tools for the development of local economies represented in stocks, bonds, Sukuk, and others. These securities have been diverse in their offering in the Omani market. Currently, private companies now offer Islamic sukuk following the recent approval by the Capital Market Authority of new sukuk regulations. The authority issued an administrative decision approving a private company’s prospectus for a sukuk issuance of RO 58 million. Earlier, Omani companies operating in the insurance, tourism, urbanisation and other sectors did issue some sukuk certificates.
Of particular significance today is a new sukuk issuance planned by Mohammed Al Barwani LLC, a leading player in the Oil & Gas, investment and energy sector in Oman. It is expected that the issuance be subscribed by investment funds interested in supporting feasible investment projects. Such opportunities will contribute effectively to the growth of administrative and technical jobs for Omani jobseekers as well as drive socioeconomic development.
Some Omani banks have started promoting the sukuk to help secure the funding required by the issuer to start a number of scheduled projects. The success of the company in this endeavor will prompt more Omani companies and institutions to turn towards investors in financing future projects that Oman seeks to achieve within the framework of the 2040 Vision.
As it is known, sukuk are securities that are compatible with Islamic Sharia, and give the bearer ownership of a share in a completed project or under construction and development or in a specific investment, but the sukuk shareholders’ share with the executing company the profit and loss, based on the jurisprudential rule that is, sharing in the profit and loss.
Some believe that Islamic sukuk has a characteristic that distinguishes it from other investment tools, which makes it attractive to investors, institutions and governments that implement such projects. Some experts cite the projects of Fitch Ratings which expects the global sukuk sector to grow to reach a value of about $40 billion in 2023. This growth will be concentrated in a number of countries, including the Gulf Cooperation Council states, and other Islamic countries such as Egypt, Malaysia, Indonesia and Turkey.
If we look at the Omani market, we find that the number of sukuk issuances is very small compared to other Gulf markets, at a time when Islamic banks and windows in Oman seek to participate in promoting such projects that are looking for large funds.
In general, there are many features that characterise sukuk, the most important of which is flexibility, as the holder of the sukuk can sell, mortgage, or gift it to anyone in accordance with the law, while some governments issue sukuk in order to cover any financial deficit they have, considering that it is a testimony of Indebtedness, ownership and investment in the assets of the institutions.
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