Interview: Hamed Ali
With sukuk (Islamic bonds) listings reaching $51.2bn worldwide, what steps are being taken to diversify sharia-compliant products?
HAMED ALI: We have seen a positive performance for the sukuk market in 2019. The sukuk listings made during the first 10 months of 2019 amounted to a combined value of $12bn, outperforming the $11.7bn that was recorded over the entire course of 2018. Additionally, we have seen elements of innovation in the issuances of 2019. For example, we welcomed the world’s first benchmark green corporate sukuk, issued by Dubai-based company Majid Al Futtaim, and our first green sovereign bond was issued by the government of Indonesia.
The exchange continues to diversify and introduce a variety of new products that meet the demands of investors and market participants from the region and internationally. In the area of Islamic finance, our murabaha (cost-plus financing) platform remains the largest in the region, with over $149bn of transactions processed since its inception in 2014. In other sectors, our equity derivatives market has continued to expand to include 33 single-stock and index contracts on the UAE and Saudi markets. As Dubai prepares to host Expo 2020, innovation and partnership will be a prevailing theme across all sectors of the exchange. We are excited to be working on a number of new initiatives, which we are confident will be well received by investors and issuers alike.
To what extent can agreements between capital markets and economic free zones, as well as legislation, help to boost listings?
ALI: Cooperation between entities such as Nasdaq Dubai and the Jebel Ali Free Zone Authority (JAFZA) has been and will continue to be a key focus to facilitate the listings of small and medium sized enterprises. Our agreement with JAFZA provides businesses based in the free zone with a number of waivers that enable them to list on the stock exchange. Federal regulations on foreign ownership of onshore companies are also expected to boost investor confidence regarding listings by a variety of businesses on Nasdaq Dubai.
What strategies are in place to attract institutional and retail investors to the stock exchange?
ALI: The exchange has set itself up from the beginning to bring on board members and participants from around the globe, creating a platform that provides all issuers – including listed companies – with a mix of regional and global investors. Our strong relationship with international organisations, such as Luxembourg’s post-trade services provider Clearstream and Belgium-based financial services company Euroclear, provides investors with a familiar investment platform. Furthermore, our annual roadshows in New York and London offer our listed companies an ongoing avenue to connect with substantial investors in those locations.
Which countries and entities are seeing notable changes in demand for listings, and how do you foresee this shifting over the next few years?
ALI: Over the past years we have remained active and committed to developing our activities across the region. At a regional level Nasdaq Dubai is home to listings from the UAE, Saudi Arabia, Bahrain, Kuwait, Egypt and Jordan. Outside the region, the exchange has succeeded in attracting significant corporate and sovereign debt listings from Asia, including China, Hong Kong and Indonesia. We expect our relationships with these countries to grow and develop further, and we also anticipate expansion in our links with a variety of other areas that offer great capital markets potential, such as Central Asia. Kazakhstan is one of a number of jurisdictions in that region that we have been working with closely. Given the commitment of the Kazakhstan government to developing the financial services sector, we expect that the capital market will play a growing role in the ongoing expansion of Kazakhstan’s economy.
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