Dubai fast-tracks Islamic finance initiative (By IFN)

Dubai fast-tracks Islamic finance initiative

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UAE: The mood in Dubai is nothing short of enthusiastic. Across the Dubai International Financial Center (DIFC), market players are abuzz with the latest announcement by the emitrate’s vice president and prime minister, Sheikh Mohammad Rashid Al Maktoum, to make the country into the world’s hub for Islamic finance. Everyone from lawyers to bankers to stock exchange officials are looking to mobilize initiatives as a response to the Dubai ruler’s call. “The pressure is coming from the top; and all of us are looking to make this a reality,” a DIFC-based player told Islamic Finance news. “Everyone from the Dubai Economic Council, Dubai Financial Market (DFM) and NASDAQ Dubai have already begun to work on this; with the DFM inviting experts to council on their standards for trading and acquiring Sukuk and NASDAQ Dubai seeking more Islamic issuers to list,” he added. Yesterday, Sheikh Mohammad Rashid Al Maktoum launched the first executive plan of his Islamic finance initiative on the floor of the DFM, dubbed “Transforming Dubai into a Global Center for Islamic Bonds” to create a center for issuing, listing and trading Sukuk to encourage organizations to issue Sukuk instead of conventional paper. Sultan Nasser Al Suwaidi, the governor of the Central Bank of the UAE has also affirmed their commitment to encourage the issuance of Sukuk; stating that an active bond market will create more liquidity, and act as a buffer in the event of any future financial crisis. He said: “We encourage issuing bonds as this will help meet up the challenges and finance any project in a way that does not harm our banking sector, following the flow of massive funds out of the country which led to liquidity crisis and lack of confidence in the economy. When there is no active local bond and Sukuk market, banks will be forced to buy bonds in the international markets, and this situation will put us in a high risk at crises.” It is definitely exciting times for the emirate and the GCC as a whole, as the main market movers look to increase their efforts in this space; and indeed timely as Dubai rebounds from the 2008 financial crisis.