Faizel Patel, Radio Islam News – 20-11-2018
Durban-based Islamic bank Al Baraka has become the first South African financial institution to issue a Tier 2 Capital Sukuk, a Shariah-compliant investment raising R200 million from the retail market.
In a statement, the bank says its issuance decision is in line with an escalating international trend, with the Sukuk market globally demonstrating considerable growth in recent years.
Sukuk issuances world-wide totalled a massive US$116.7 billion in 2017 growing by around 32% from the US$ 87.9 billion achieved in 2016 as reported in the 7th Edition of the International Islamic Financial Market Sukuk Report for April 2018 .
Al Baraka’s Sukuk issuance Financial Director Abdullah Ameed says their Sukuk initiative has been fully subscribed.
“Initially it was gradual to gain traction because this type of investment structure was new to the South African Islamic market, we are most gratified to have achieved the target by raising these funds from the retail market.
Ameed says a total of 94 people and institutions have invested in the country’s inaugural Tier 2 Capital Sukuk by a bank.
“We are most grateful to the investors who have supported us in becoming the first South African bank to venture into Tier 2 Sukuk, as an investment vehicle. We look forward now to growing the South African market for the mutual benefit of all our stakeholders including prospective new customers”
Sukuk is Arabic for investment certificates, issued for the purpose of raising money for utilisation within a corporation or Government entity.
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