IRTI and Al Rajhi Bank Malaysia collaborate on capital market development initiatives for IDB member countries - IFN

IRTI and Al Rajhi Bank Malaysia collaborate on capital market development initiatives for IDB member countries

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GLOBAL: After two months of discussions, the Islamic Research & Training Institute (IRTI) and Al Rajhi Bank Malaysia (ARBM) signed an MoU today to cooperate in economic development projects across the IDB member countries. The strategic agreement was signed between Azrulnizam Abdul Aziz, CEO of ARBM, and Dr Mohamed Azmi Omar, the director-general of IRTI. By virtue of the MoU, both entities will be supporting IDB member countries looking to issue Sukuk as well as enhance their capital market. In its role as a research and training institute, IRTI will identify and provide advisory services to the member countries in terms of the structures and instruments that can be used, while ARBM will afford its technical support for these fund-raising schemes. In his speech during the signing ceremony, Dr Mohamed Azmi said: “A number of countries will be coming to the market next year to raise Sukuk especially from African countries.” He elucidated that North African nations which have recovered from recent political turbulence are now termed as the “new emerging market”. The IDB is currently in the process of implementing its “reverse-linkage” approach, which has been identified as a key funding strategy for the multilateral institute. Under this agenda, the IDB will pool resources and skills from its network to help a specific country looking to issue Sukuk. Presently, IRTI has identified Tunisia, Morocco and Libya as North African countries which are most in need of support in this area. The collaboration seeks to help sovereigns and state banks in improving the legal framework to cater to Shariah compliant financing as well as assist in technical and infrastructure advancements. Dr Mohamed Azmi also noted that many countries in the Middle East and Africa are in need of infrastructure funding and that Sukuk would be the most fitting fund-raising mechanism due to its asset-backed nature. He added: “The growth of Sukuk will start to move towards North Africa.”