MAS Announces Initiative To Develop Singapore Dollar Sovereign-Rated Sukuks
Singapore, 13 May 2008...The Monetary Authority of Singapore (MAS) announced today that it will develop a facility to make available sovereign-rated sukuks to promote the further growth of Islamic finance and to meet the needs of financial institutions conducting Shariah-compliant activities in Singapore.
2 Speaking at the 5th Islamic Financial Services Board Annual Summit held on 13 May 2008 in Jordan, Heng Swee Keat, Managing Director, MAS said “Our facility is likely to be different from traditional issuances in two respects. First, the issuance will be on a reverse enquiry basis, which means we will issue according to the needs of financial institutions in Singapore conducting Islamic finance. Second, at the initial stage, we plan to price these against the liquid Singapore Government securities market. This will provide a transparent price discovery mechanism for this new instrument. As the S$ sukuk market grows and deepens in time, it can then develop its own pricing benchmarks. The design of our sukuk issuance facility reflects our effort to harness the price discovery potential of existing liquid instruments, while adhering carefully to Shariah principles.”
3 MAS will announce further details of the scheme in due course.