Latest news with #ShariahCompliance
Khaleej Times
01-06-2025
- Business
- Khaleej Times
New Fatwa initiative ushers in new era for $5 trillion Islamic finance
Diamond Standard Co., the producer of the world's only regulator-approved natural diamond commodities, has secured a historic Fatwa, marking a landmark moment for the for $5 trillion global Islamic finance industry. Issued by Sheikh Dr. Mohamed Ali Elgari, a towering figure in Islamic finance, the new Fatwa endorses the use of diamond commodities as a Shariah-compliant solution for Islamic financial applications, particularly commodity Murabaha. Announced on May 29 in Dubai, the development promises to reshape the fast-growing Islamic finance sector, blending time-honoured ethical principles with cutting-edge technology to create a more efficient, transparent, and accessible financial ecosystem. Sheikh Dr. Elgari, a former professor and director of the Centre for Research in Islamic Economics at King Abdulaziz University, brings unparalleled authority to this endorsement. His extensive experience includes serving on Shariah boards for prestigious institutions like the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), Islamic Fiqh Academy, and major banks such as Abu Dhabi Islamic Bank, HSBC, and Standard Chartered. His Fatwa validates diamond commodities as a viable, Shariah-compliant asset, addressing longstanding challenges in Islamic finance where interest-based lending is prohibited. Islamic finance, governed by Shariah principles, requires transactions to be asset-backed, often through structures like commodity Murabaha, where a bank purchases an asset and sells it to a client at a markup, payable in installments. Historically, metals like nickel, copper, or aluminum have been used for these transactions, often as paper-based options or warrants. However, the introduction of AAOIFI Standard 62, which mandates physical delivery of the commodity's title to the borrower, has rendered these practices non-compliant. Additionally, gold, silver, and food commodities are prohibited for Murabaha, and metals incur high storage and delivery costs, creating inefficiencies for Islamic banks. Diamond Standard's solution is a game-changer. Its physical diamond commodities—coins and bars—are optimised sets of diamonds sealed with a wireless computer chip, ensuring transparency and uniformity. These commodities are fully deliverable, fungible, and tradeable on spot exchanges with daily prices reported by Bloomberg. The embedded chip enables instant title transfer and remote audits via a public blockchain, eliminating uncertainty and ensuring compliance with Shariah requirements. With custody and delivery costs up to 97 per cent lower than those for metals like copper, diamond commodities offer a cost-effective and practical alternative. This innovation has also been approved for settling futures and options regulated by the U.S. Commodity Futures Trading Commission (CFTC), with internal audits conducted by Deloitte, reinforcing its credibility. The Fatwa's issuance follows a request from a consortium of Islamic banks seeking a Shariah-compliant Murabaha solution with audited physical custody in a Muslim-majority country. Diamond Standard has responded by establishing a commodity holding and trading company in the GCC region, backed by $280 million in capital commitments. This entity will supply diamond commodities to Islamic financial institutions and trading platforms, creating a robust market for Murabaha transactions. It will also offer a listed fund for equity and Sukuk investors, enabling them to invest in diamonds as a hard asset with potential for value appreciation driven by both Islamic and broader investment demand. The initiative is expected to generate over 200 jobs in the GCC, spanning commodity operations, trading, custody, and Islamic finance roles, while boosting regional manufacturing, exports, and trade. To further enhance accessibility, Diamond Standard has partnered with the Dubai Multi Commodities Centre (DMCC) to provide audited, tax-free custody for its commodities. This strategic move, announced alongside the Fatwa, eliminates tariffs that would apply to diamonds entering markets like the US, benefiting Islamic banks and investors. The DMCC, a leading hub for global trade, is already recognised for its Shariah-compliant Tradeflow platform, which supports commodity Murabaha and aligns with AAOIFI standards, as certified by its Shariah Supervisory Board, which includes Dr. Elgari. This partnership underscores Dubai's growing role as a global Islamic finance hub, with the UAE's Islamic finance industry valued at over $285 billion in Q1 2025, according to Fitch Ratings. Cormac Kinney, founder and CEO of Diamond Standard, emphasised the transformative potential of this development: 'We set out to unlock $1.2 trillion of natural diamonds as an investment asset, but their dense value, paired with modern technology, has made them ideal for Islamic finance. We are honored to strengthen Islamic values through this innovation.' By fusing blockchain technology with the intrinsic value of diamonds, Diamond Standard is pioneering a new asset class that aligns centuries-old Shariah principles with 21st-century financial innovation. This breakthrough comes at a time of rapid growth for Islamic finance in the UAE and GCC. The UAE's new strategy, announced in May 2025, aims to double Islamic banking assets to Dh2.56 trillion by 2031 and boost Sukuk issuances to over Dh660 billion, reinforcing the region's leadership in the $2.44 trillion global Islamic finance industry. Diamond Standard's Fatwa-approved commodities position it at the forefront of this expansion, offering a scalable solution that enhances financial inclusion and efficiency. The impact of this Fatwa extends beyond finance, promising to democratize access to a $1.2 trillion natural resource while fostering economic growth in the GCC. By addressing compliance challenges, reducing costs, and leveraging blockchain for transparency, Diamond Standard is not only redefining commodity Murabaha but also paving the way for a more inclusive and innovative Islamic finance ecosystem.
Zawya
28-05-2025
- Business
- Zawya
Dubai Residential REIT debuts on DFM as the GCC's largest and first listed pure-play residential leasing focused REIT
Dubai Residential REIT IPO was priced at the top end of the range and attracted overwhelming demand, with the Offering oversubscribed by 26 times and total gross demand exceeding AED 56 billion (USD 15 billion). The Offering raised AED 2,145 million (USD 584 million), with Dubai Residential REIT listing at a market capitalisation of AED 14.3 billion (USD 3.9 billion), firmly positioning it as the largest listed REIT in the GCC. Marks the debut of the first listed pure-play residential leasing focused REIT in the GCC, the first REIT under the UAE's updated regulatory framework, and the first listing on DFM in 2025, reinforcing Dubai's role as a leading hub for diversified investment opportunities. Dubai, UAE: Dubai Financial Market today welcomed the successful debut of Dubai Residential REIT, a Shariah-compliant income-generating closed-ended real estate investment fund and one of the largest owners and operators of residential real estate in Dubai, trading under the symbol 'DUBAIRESI' and ISIN 'AEE01657D252'. The listing of Dubai Residential REIT on DFM marks a significant milestone for Dubai's capital markets, introducing the GCC's first listed pure-play residential leasing focused REIT and the region's largest listed REIT with 35,700 residential units under management. It also represents the first REIT to list under the UAE's updated regulatory framework and the first listing on the DFM in 2025, underscoring Dubai's position as a leading hub for diversified investment opportunities. The initial public offering ('IPO' or the 'Offering') of Dubai Residential REIT raised AED 2,145 million (USD 584 million), with overwhelming interest from local, regional, and international investors, reflecting strong confidence in Dubai's mature residential real estate market. The Offering of 1.95 billion units was fully subscribed within minutes of the book opening, resulting in a final offer price set at the top of the indicated range, AED 1.10 per offer unit. Dubai Residential REIT debuts with a market capitalisation of AED 14.3 billion (USD 3.9 billion) and a projected gross dividend yield of 7.7% for 2025. In response to exceptional demand across all investor tranches, DHAM REIT Management LLC (the 'Fund Manager') increased the size of the Offering from 12.5% to 15.0% of Dubai Residential REIT's total issued unit capital. The total gross demand surpassed AED 56 billion (USD 15 billion), resulting in an overall oversubscription of 26 times at the final offer price. Following the listing, DHAM Investments LLC ('Selling Unitholder'), a subsidiary of Dubai Holding, retains a majority stake of 85% in Dubai Residential REIT. Dubai Residential REIT is designed to offer investors a simple, cost-effective way to access high-quality, income-generating residential real estate across Dubai, enabling participation in the emirate's dynamic real estate growth story without the complexities of direct ownership, aligning with the UAE's broader commitment to fostering inclusive and diversified capital markets. To commemorate the listing, Malek Al Malek, Group Chief Executive Officer of Dubai Holding Asset Management and Chairman of the Investment Committee of DHAM REIT Management LLC, and Nabil Ramadhan, Chief Strategy and Marketing Officer at Dubai Holding Asset Management and Chairman of the Board of Dubai Residential REIT, rang the market-opening bell at DFM, accompanied by His Excellency Helal Al Marri, Chairman of the DFM Board of Directors, Hamed Ali, Chief Executive Officer of DFM and Nasdaq Dubai, along with Amit Kaushal, Group Chief Executive Officer of Dubai Holding and Omar Karim, Group Chief Investment Officer of Dubai Holding. His Excellency Helal Al Marri, Chairman of the DFM Board of Directors, said: 'The successful debut of Dubai Residential REIT on DFM exemplifies our broader efforts to expand access to asset classes that reflect the economic ambitions of Dubai. It speaks to the continued evolution of our capital markets and the strength of investor confidence in our vision. Under the guidance of His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, we remain committed to deepening market sophistication and unlocking diversified, Sharia-compliant investment pathways.' Amit Kaushal, Group Chief Executive Officer of Dubai Holding, said: 'The successful listing of Dubai Residential REIT on DFM is a significant milestone, not only for Dubai Holding but for the continued evolution of the Emirate's capital markets. This achievement reflects our long-standing commitment to unlocking value from strategic assets, supporting the UAE's vision for economic diversification and advancing Dubai's position as a leading global hub for investment. We are proud to contribute to shaping the future of real estate investment through innovation, scale and institutional excellence.' The successful listing of Dubai Residential REIT reinforces DFM's role as a leading platform for diversified investment products and reflects the growing demand for structured, income-generating assets within the region. Hamed Ali, Chief Executive Officer of DFM and Nasdaq Dubai, added: 'The listing of Dubai Residential REIT on DFM marks a pivotal moment in our ongoing efforts to diversify investment opportunities and enhance market depth. This successful IPO not only reflects the strength of Dubai's real estate sector but is a testament to the trust placed in Dubai's regulatory infrastructure and our ability to deliver efficient, accessible, and forward-looking capital markets. We are proud to support Dubai Holding in this endeavor and to welcome a new sector-leading REIT to the market.' Malek Al Malek, Group Chief Executive Officer of Dubai Holding Asset Management and Chairman of the Investment Committee of DHAM REIT Management LLC, added: 'This milestone marks a defining moment for the region's real estate and investment landscape. The listing of Dubai Residential REIT, the GCC's first REIT focused exclusively on residential leasing and the largest of its kind, underscores the strength of our strategic vision, the quality of the asset portfolio, and our commitment to sustainable, long-term growth. We are proud to bring this opportunity to a wider investor base and look forward to delivering consistent value to unitholders while contributing to Dubai's ambition for dynamic, transparent capital markets.' This momentum further reinforces DFM's status as a dynamic and resilient capital markets platform. As of the date of this announcement, the total market capitalisation of companies listed on DFM reached AED 962.7 billion, with the exchange achieving its highest Average Daily Trading Value (ADTV) in more than a decade, representing a 58% increase over last year. This performance reflects sustained investor engagement, robust trading volumes, and strong capital inflows, despite global uncertainties impacting sentiment in other markets. In connection with the Offering, the Selling Unitholder has allocated proceeds from the sale of up to 243,750,000 Offer Units to xCube LLC, a DFM-authorised price stabilisation manager appointed by the Fund Manager. These proceeds may be used, in accordance with applicable laws and the DFM Trading Rules, to conduct stabilisation transactions on the DFM. The Banks and their respective directors, officers, employees, agents, and affiliates will not be involved in, responsible for, or benefit from any such transactions, which will be carried out solely by xCube LLC. Citigroup Global Markets Limited, Emirates NBD Capital PSC, and Morgan Stanley & Co. International plc have been appointed as Joint Global Coordinators and Joint Bookrunners (the "Joint Global Coordinators"). Emirates NBD Bank PJSC has been appointed as the Lead Receiving Bank. Abu Dhabi Commercial Bank PJSC, Arqaam Capital Limited acting in conjunction with Arqaam Securities LLC, and First Abu Dhabi Bank PJSC are acting as joint bookrunners (together with the Joint Global Coordinators, the "Banks") for the Offering. About Dubai Financial Market: Dubai Financial Market (DFM) was established as a public institution with its own independent corporate body. DFM operates as a secondary market for the trading of securities issued by public shareholding companies, bonds issued by the Federal Government or any of the local Governments and public institutions in the country, units of investment funds and any other financial instruments, local or foreign, which are accepted by the market. The DFM commenced operations on March 26, 2000 and became the first Islamic Shari'a-compliant exchange globally since 2007. Following its initial public offering in November 2006, when DFM offered 1.6 billion shares, representing 20 per cent of its paid-up capital of AED 8 billion, DFM became a public joint stock company, and its shares were listed on 7 March 2007 with the trading symbol (DFM). Following the IPO, the Government of Dubai retained the remaining 80 per cent of DFM Company through Borse Dubai Limited. About Dubai Residential: Dubai Residential stands at the forefront of Dubai's residential leasing sector, managing one of the city's most diverse portfolios as part of Dubai Holding Asset Management. From the premium residences at Bluewaters and City Walk to the family-focused communities of The Gardens, Garden View Villas, Remraam, Layan, Ghoroob, Shorooq, and Nad Al Sheba Villas, its 21 vibrant, fully integrated communities comprising over 35,000 homes cater to the unique lifestyle and preferences of more than 140,000 residents. Dubai Residential is committed to innovative urban development, enhancing the city's appeal while contributing to its long-term growth vision. To learn more about its portfolio, visit: For further information, please contact: Noora Al Soori Communications and Public Relations Dubai Financial Market E: nalsoori@ Shruti Choudhury Associate Director Edelman Smithfield E: dfmedelmansmithfield@ Jeehan Balfaqaih / Jamil Fahmy Partner Brunswick Group E: dubairesidential@
Zawya
26-05-2025
- Business
- Zawya
Saudi-listed 2P expands, renews $20mln Islamic credit facility
Perfect Presentation for Commercial Services Company (2P) has renewed and expanded its Shariah-compliant facility with Saudi National Bank. The 73.6 million Saudi riyal ($19.62 million) facility will be used to support newly awarded projects through letters of guarantee, letters of credit and invoice financing. The facility has been extended until May 30, 2026, and is secured by promissory notes covering the entire facility amount. In April, 2P raised and renewed a facility agreement valued at SAR 150 million with Bank Aljazira.
Zawya
26-05-2025
- Business
- Zawya
Saudi Arabia's Pan Gulf secures $19mln Islamic loan Saudi Awwal Bank
The Saudi Arabia-based Pan Gulf Marketing Company has secured a 70 million Saudi riyal ($18.66 million) Shariah-compliant facility from Saudi Awwal Bank (SAB). The one-year facility will be used to boost its working capital, issue government and non-government guarantees and letters of credit. The facility is guaranteed by a promissory note. In October 2024, the company secured Shariah-compliant credit facilities of SAR 135 million from Banque Saudi Fransi to support its working capital needs. (Editing by Brinda Darasha;
Arab News
20-05-2025
- Business
- Arab News
Saudi Arabia surpasses $1bn sukuk milestone with May issuance
RIYADH: Saudi Arabia's National Debt Management Center has surpassed the $1 billion threshold in its latest sukuk issuance, raising SR4.08 billion ($1.08 billion) in May through riyal-denominated offerings. This marks a 9.09 percent increase from April and reflects a significant 54.5 percent rise compared to March, when SR2.64 billion was raised. The May issuance continues the Kingdom's strong momentum in the domestic debt market, following SR3.72 billion raised in January and SR3.07 billion in February. The consistent monthly issuances highlight growing investor interest in Shariah-compliant fixed-income instruments, as global financial markets adjust to a higher interest rate environment. Sukuk, the Islamic equivalent of bonds, are structured to comply with Shariah principles, which prohibit interest-based transactions. Instead, investors receive returns derived from partial ownership in tangible assets or investment activities, aligning with Islamic finance ethics. According to the NDMC, the May offering was divided into four tranches. The first tranche amounted to SR489 million and is set to mature in 2029. The second was valued at SR1.004 billion and will mature in 2032. The third tranche, totaling SR1.28 billion, is due in 2036, while the largest portion of the issuance, worth SR1.3 billion, will mature in 2039. Saudi Arabia's debt market has seen rapid growth in recent years, as domestic and international investors seek diversification and stable returns. A report released in April by the Kuwait Financial Center, also known as Markaz, noted that Saudi Arabia led the Gulf Cooperation Council's debt market in the first quarter of 2025. The Kingdom accounted for 60.2 percent of all primary debt issuances in the region, raising $31.01 billion across 41 offerings. In a broader outlook, S&P Global highlighted Saudi Arabia's expanding non-oil economy and robust sukuk activity as key drivers of growth for the global Islamic finance sector. The credit rating agency forecast global sukuk issuance could reach between $190 billion and $200 billion in 2025, with foreign-currency issuances potentially totaling up to $80 billion, assuming stable market conditions. Furthermore, a December 2024 report by Kamco Invest projected that Saudi Arabia will lead the GCC in bond maturities over the next five years. Between 2025 and 2029, approximately $168 billion in Saudi bonds are expected to mature, underscoring the Kingdom's dominant position in the region's debt landscape.
