Beruflich Dokumente
Kultur Dokumente
In Sukuk Issuance
Presentation By:
Osman Hamad Mohd-Khair
General Manager
Sudan Financial Services Company
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Bank of Sudan
Contents
Introduction
First Generation Of Islamic Products
Central Bank Musharaka Certificates (CMCs)
Government Musharaka Certificates (GMCs)
Second Generation Of Islamic Products
Short- term Salam Securities
Islamic Lease (Ijara) Securities
Islamic Development Sukuk
Government Investment Certificates (GICs)
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Introduction
4
Basic Reqirements for Success
of Securitization
Full compliance with Islamic Shariah
Appropriate Laws that enable the Securitization and
protect interest of investors & issuers
Marketability of the instruments
Profitability (yield / competitiveness)
Low transaction cost
Security
Transparency appropriate flow of financial data investors +
historical financial statistics
Operational,standardization,systems and documentations
Appropriate accounting standards
Grading assets liquidity & risks
Standardized service quality
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Existence of deep efficient active market
Regional co-ordination
Proper credit- rating of banks, issuers and
instruments
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A-First Generation Of Islamic Products
CMC’s
1-Objectives:
New instruments intended to regulate
domestic liquidity in the banking system
through OMO
Offer banks an investment opportunity for
their excess reserves
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2- Description:
Asset - based securities issued agaist BOS
& government ownership in commercial
banks
CMCs nature is an asset securitization
Satisfy Sudan Islamic banking rules which
prohibits ex ante guaranteed positive return
on security
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3- Mechanism & Mode of Issue:
No. of CMCs is arrived at by dividing the
accounting or book value of the pool of
investments on April 30,1998 by an
arbitrary initial nominal value for each
certificate which is equal to the fair market
value defined as the book value of equity
capital +reserves i.e. :
LS (39,400,000,000 ÷ 10,000,000)=3940
certificates
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4- Charactcteristics of CMC’s:
Issued in compliance with Sharaiah laws
Fixed numbers of CMCs
Issued in fully registered form
Open maturity
Transferable –fully negotiable
Tradable- listed in KSE
Access is limited to commercial banks, gov.
owend companies funds and insurance companies
Bids are submitted per number of CMCs in
“SD000”
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5- Standard Terms Of Auctions
CMCs are sold in a competitive uniform
types of auction .Bids will be classified
according to the high price and winning
bids will be awarded in descending order to
the lowest price to the point where the
accumulated winning bids absorb the total
amount offered for sale. The opposite will
happen when purchasing CMC’s (See the
table)
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Certificates Offered for Sale
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SALIENT FEATURES OF
GMC’s
Fixed –term securities (one year)
Issued in fully registered form
Listed in KSE (tradable)
Transferable & fully negotiable
Access to GMCs is not limited
Ownership is trans and fully negotiable
High rate of return (round 30%).
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B-Second Generation Of Islamic Products
(Salam/Sukuk)
Nature and legality of Salam securities:
Salam government securities are instruments
representing assets ( which are sold for advance payments
against deferred delivery) and which are accounted as
aliability ( of the seller ). The Government issues these
securities to create new fields for the investment of surplus
financial resources in the society and to provide short-term
financing for the expenditures and needs of various
investment projects.
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The securities are kept until the delivery date. The
.
Manager may be authorized to receive the commodities
and to sell them to an independent party who does not own
the commodity wholly or partially and who pledge to
purchase the commodity at a price exceeding the forward
buying price. The sale price is distributed to the holders of
the securities according to ownership percentages after the
Manager’s actual expenses and management commission
are deducted based on an investment authorization contract
. The expense and commission must not exceed certain
percentage
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Definition Of A Salam Contract
The Mudarabah
will lease the At maturity to conclude a Mudarabah to be liquidated
purchased tangible sale contract for selling and sukuk redeemed
assets to interested leased assets
parties on Ijara
Liquation basis for
rental rental income -Mudarabah To execute
the contract
-Mudarabah To execute the contract
-to receive the sale price
-To get collateral & security from the
lessee Secondary market
-To collect the periodical rented trading of issued
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income sukuk
Islamic Development Sukuk
These types of Sukuk can be developed and
offered to be utilized in the mobilization of
short- term deposits for the development of
long -term infrastructure projects
The structure and mechanism for issuing such
instrument is as follows:
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5. To lease (Ijara wa lqtina) the finished
contracted or built assets to (lessee)
6. To manage both the liability and assets of
the mudarabah
7. To trade both the issued certificates
(sukuk)in the secondary market
8. At maturity , to liquidate the mudarabah
and redeem the issued Sukuk
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ISLAMIC DEVELOPMENT SUKUK
(10_15 YEARS)
Issue and offer The Mudarabah
Incorporating a Special participation sukuk to the
purpose Mudaraba will bulid needed infr-structure
market
projects on Istisna basis
Central Bank is the Mudareb to collect Mudareb will execute
Mudareb the subscription the istisna contract
with qualified
The Mudarabah contractor
will lease the built At maturity to conclude a
tangible assets to sale contract for selling the Mudarabah to be
interested parties on leased assets liquidated and sukuk
Ijara Wa Iqtina basis redeemed
for rental income
-Mudareb To execute the
-Mudarabah To execute the contract contract
-To get collateral & security from the -to receive the sale price
lessee
-To collect the periodical rental Secondary market trading of
income issued sukuk 26
Sudan Government Investment Certificates
(GiCs)
Objectives
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Key Structural Elements
Underwriter.
Holding and fund management legal entity.
An open-end fund.
A pool of assets composed of appropriate Islamic
financial contracts (vs. shares in companies in GMC
type security).
Securities (Certificates) issued against the fund's
assets
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Contract Choice for Financing the Government:
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GIC- design features
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GIC- design features
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Regulation & Supervision of Sukuk (Governance)
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As Mr. Johnnie puls it “but where problem
exists , opportunities abound and aggressive
and innovative financial institutions should
find fertile grounds for offering Islamic
securitization products”
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