Pak High Commissioner to United Kingdom Mohammad Nafees Zakaria has said the Sukuk market has been consistently gaining ground in Pakistan’s growing Islamic finance industry and there has been a concerted push by regulatory authorities in the country to promote the Islamic finance industry on a sustainable basis, with regular Sukuk issuance being a key element of this strategy.
The London Sukuk Summit is the world’s premier Sukuk and Islamic capital Markets gathering that took place from July 2 to 3. It attracted finance, business and industry leaders from around the world to discuss economic opportunities available in the Islamic financing industry.
According to details, Zakaria delivered a keynote address at London Sukuk and Fintech Summit 2019. Some of the main speakers at the summit included John Glen MP, UK Economic Secretary to the Treasury, Oussama A Kaissi, CEO Islamic Corporation for Insurance and Investment and Export Credit; Dato Badlisyah Abdul Ghani, Chairman and ECO Pay Halal; Charles Haresnape, CEO Gate House Bank; Abradat Kamalpour, Global Head of Islamic Finance and Fintech partner, Ashurst LLC; and Dr. Mohamed Damak, Director Global Head of Islamic Finance.
The High Commissioner also briefed the participants about the various investment opportunities available in Pakistan. He highlighted that the changing global environment was shifting the global economic gravity to the Asian continent.
In this backdrop of the emerging trends, he gave an overview of regional economic developments, Pakistan’s strategically important location at the centre of the region to play the role as a regional economic hub and energy corridor, China’s Belt and Road initiative, China Pakistan Economic Corridor (CPEC) and economic opportunities offered by developmental needs of the countries in the region with half of the world’s population as a consumer market.
“CPEC is the manifestation of Pakistan’s geostrategic importance and location as a key trade route that connects landlocked Central Asia and Afghanistan, Western China and South Asia with West Asia and beyond through the Arabian Sea,” he said.
In terms of investment opportunities, Zakaria identified priority areas of the Pakistan government and talked about special economic zones (SEZs), tourism infrastructure development, energy sector, higher education, agriculture, pharmaceutical, and IT sectors. The High Commissioner also offered his supports for facilitating potential investors who intended to seek guidance and assistance \to enter into the Pakistani market.
Meanwhile, John Glen, the British Economic Secretary to the Treasury speaking at the 2019 London Sukuk and FinTech Summit said that the United Kingdom intends to remain the “western hub of Islamic finance” as it prepares to launch its second sovereign Sukuk or Sharia-compliant bonds. “The success of our financial sector is proof that we are a dynamic country, a country of opportunity uniquely suited to Sukuk and Islamic finance,” said John Glen.
Even after the Brexit, Britain will remain committed to international markets, including the development of Islamic finance. The UK was the first non-Islamic country in the world to issue a Sukuk when it raised £200 million (Dh923.3m) in 2014. The five-year deal is maturing later this month and the government has plans for another Sharia-compliant debt raising through its second Sukuk issuance.
The announcement by the UK chancellor of the exchequer, or finance minister, Philip Hammond, two weeks ago, did not give the size or the timing of the new deal, which will replace the facility maturing next month. Although sparse on details, Mr. Glen said the new Sukuk will be Sterling denominated, “which should help UK-based Islamic finance institutions meet their mandatory liquidity requirements without extra FX risk”.
“Until recently there was no Sukuk outside the Muslim world. Islamic finance evolved … to [become] a veritable force of financing, the UK stood up, took notice and embraced the opportunity,” he added. The London Stock Exchange listed its first corporate Sukuk in 2007 and its first sovereign Sukuk in 2008. Since then, 72 Sharia-compliant bonds have listed in London amounting to $53 billion (Dh194.64bn), with 2018 being a record year with $8.6bn.
Al Rayan Bank, the UK’s largest Islamic bank, issued the largest ever Sterling-denominated Sukuk of £250m in February last year. “We have a single secular regulatory framework to cover Sharia financial products and that’s why we have higher concentrations of Islamic finance activity than any other OECD country,” Mr. Glen said. “I believe the London skyline is a testament to that with the Shard, Battersea Power Station and the Olympic Village in Stratford all being funded with the help of Islamic finance.”
“The City of London has always been a beacon, drawing business, capital, and talent from around the world. It’s shone even more brightly over the past few decades as we have embraced the energy of Islamic financing. And that beacon will continue long into the future, not dimmed by Brexit but fuelled by Brexit as we move to be a truly global Britain.” Including Al Rayan, there are five fully Sharia-compliant banks in the UK with assets of $5.5bn as of the first half of last year.