First Irish Sukuk in the pipeline? (By IFN)

Tuesday 25^th September 2012

IRELAND: The Irish republic may be one step closer to establishing itself as a European hub for Islamic finance, having already emerged as a favorite domicile for Shariah compliant funds. Reports are now circulating that Irish utility, the Electricity Supply Board (ESB), is planning a fundraising exercise via the sale of a Sukuk in Malaysia, for which it has reportedly hired Amanie Advisors to advise on. According to market talk, the utility has also applied to the Malaysian central bank and Securities Commission Malaysia to issue a Sukuk in the country. The potential issuance would mark a milestone for the development of Islamic finance, not just in Ireland, but also in Europe; where issuers have been slow to tap Islamic markets as a source of funding. Although the ESB is reportedly eyeing the Malaysian market for its possible Sukuk sale, Ireland has in fact already put in place legislation for Islamic finance transactions. In January 2010, the Finance Bill 2010 was implemented, with rules covering tax issues for Islamic finance transactions in the republic. The Irish Stock Exchange has also attracted Sukuk listings from the likes of the UAE’s Tamweel and Jebel Ali Free Zone, while Goldman Sachs also applied for a listing on the exchange for its controversial Sukuk, which has yet to come to market. By far however, Ireland’s success in Islamic finance has been its emergence as a domicile of choice for Shariah compliant funds, including the Oasis Crescent Global Low Equity Balanced Fund and the CIMB Global Islamic Equity Fund, with Malaysia’s CIMB-Principal Islamic Asset Management already setting up a presence in the republic. Meanwhile, the Irish government has also expressed interest in issuing a sovereign Sukuk as it seeks to build the republic into a hub for Islamic finance. With appropriate legislation in place and political will on its side, a Sukuk offering by an Irish issuer may just be what the republic needs to further catalyze the growth of its Islamic finance industry.