Details on Omani debut sakk

As reported in the Oman Daily Observer (27 October 2015), this issuance of sukuk was also a first in Oman with respect to the book-building process deployed — it relied upon a uniform price auction, and resulted in subscriptions exceeding by 160 pc the offering amount of OMR 336 m (£56.7 m). As these are ijara sukuk they will be tradable  — on the Muscat Securities Market. The extent of trading will be instructive in relation to the question of whether in the Omani context the tendency for even tradable sukuk to be held until maturity (in this case five years) or whether Oman and investors in this sakk will be exceptional in that regard.

One of the declared policy goals motivating this sovereign debut is the further development of capital markets in the country, and diversification of liquidity provision and project financing — away from conventional lending and banking into Islamic financial instruments. Taken together investors’ response to the issuance and the learning curve initiated by the government suggests more sovereign and in time corporate issuances should be expected in Oman. If this prediction is born out Oman will be additional evidence of the efficacy of sovereigns in creating domestic sukuk markets and the utility of sovereign signalling to prospective corporate issuers.

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