By A. Stephanie
Abdulla Mohammed Al Awar
Having outstripped London last year in terms of sukuk listed on exchanges, the emirate of Dubai now has its eyes on Kuala Lumpur’s dominance in its goal to be the capital of the global Islamic economy.
Speaking to KiniBiz on the sidelines of the World Halal Conference yesterday, Dubai Islamic Economy Development Centre (DIEDC) CEO Abdulla Mohammed Al Awar said the value of sukuk listed in the exchanges in Dubai now exceeds US$24 billion (RM89 billion).
This puts Dubai ahead of London at US$21.06 billion, but still far behind Kuala Lumpur at US$88.21 billion.
The DIEDC was established December 2013 to manage the strategy of making Dubai the capital of the Islamic economy, as announced by its Emir Mohammed Rashid Al Maktoum earlier that year.
One of its initiatives is the Dubai Global Sukuk Centre, which was launched by the exchanges in Dubai, namely the Dubai Financial Market and Nasdaq Dubai.
Al Awar said: “This resulted in an increase in sukuk listings, from US$9 billion in 2013 and now above US$24 billion.
“Issuers are mixed between private and government sector, and even foreign governments – the latest of which was the Hong Kong Government, which listed its US$1 billion worth of sukuk last December.
“We are number two now, and were number three when we launched, so the focus will always be to keep attracting sukuk to at least maintain our position,” he remarked.
On when the emirate hopes to lead sukuk listings, he said: “There is no timeline on this, but in a span of a year and a half, we overtook London so who can say what will happen in the next year or so? But we will try to keep momentum as much as possible.”
Dubai’s selling point is its geography and exchanges, particularly Nasdaq Dubai, Al Awar pointed out.
He explained: “From the issuer’s standpoint, the benefit is that you access a different type of investor base from the region. In our region, there are around 42 countries spanning the Middle East, Africa and South Asia, which is very wealthy as well.
“Accessibility to that investor base is important, as well as a different types of investor base that does not usually invest in conventional products – these are the benefits issuers could consider.
“Nasdaq Dubai, whilst it provides a sukuk investment opportunity, is an exchange existing in a common legal framework mostly adopted by Western civilisations. So we are able to attract international investors into that market quite easily,” he added.
But Dubai’s plan to lead the global Islamic economy extends beyond sukuk listings.
Al Awar believes Dubai and Kuala Lumpur can complement each other, especially in terms of halal trade.
He said: “Jurisdictions such as Malaysia have access to the wide East Asia region. It is important for that collaboration to happen, certainly in areas where we feel that we want to promote or develop the trade of syariah-compliant activities.
“The halal industry is growing at a significant pace with expenditures on halal products by Muslim consumers totalling US$1.3 trillion by end 2013.
“That means these products have to be distributed globally, so the concept of working with other hubs and major ports to support these exports has to happen if we were to promote an Islamic economy. It doesn’t necessarily mean that we would compete, but in some ways we would collaborate,” he said.
Besides sukuk listings and the halal trade, DIEDC’s other initiatives are based on seven of its pillars, of which Islamic finance and halal are two.
Al Awar said: “On the education side, we have launched through the Hamdan bin Mohammed Smart University a dedicated centre for Islamic banking and finance that will offer postgraduate degrees in Islamic finance but also develop research in this area.
“Some of Dubai’s free zones such as the Jebel Ali Free Zone (Jafza) have announced dedicated areas of five to six million sq ft each within their parks for halal companies to operate – so far Jafza alone has already received enquiries from 650 companies,” he said.
Other pillars are family-friendly tourism, digital economy, arts and design space, knowledge and standards and certification. These combined are expected to accelerate Dubai’s growth within the global Islamic economy, he said.
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