Media Releases
Published Date: 19 January 2009

MAS Announces the Completion of Singapore Dollar Sovereign-rated Sukuk

Singapore, 19 January 2009...The Monetary Authority of Singapore (MAS) today announced the completion of its sukuk issuance facility to provide Shariah-compliant regulatory assets. The joint arrangers of the Sukuk Programme are Standard Chartered Bank and The Islamic Bank of Asia (IB Asia) and the legal counsel advising on the transactions is Allen & Gledhill. This initiative was first announced at the 5th Islamic Financial Services Board Annual Summit held in Jordan in May 2008.

2   Speaking at the signing ceremony held at MAS, Heng Swee Keat, Managing Director, MAS, said, “Today’s signing ceremony marks a further milestone in our developmental efforts.  This sukuk is the Shariah-compliant equivalent of Singapore Government Securities (SGS), and is of the highest credit standing. The sukuk will be given equal regulatory treatment as SGS, such as qualifying as an asset in the computation of capital and liquidity requirements, and as eligible collateral for tapping MAS’ liquidity.  MAS is committed to the facility, issuing to meet the needs of financial institutions that are carrying out or plan to carry out Shariah-compliant activities in Singapore, as this will strengthen their ability to meet their capital and liquidity requirements”. 

3   V. Shankar, Group Management Committee Member, Standard Chartered Bank, spoke about the unique structure of the Programme at the signing ceremony. He said “The size, maturity and pricing of each issuance will be determined in line with the investor requirements and the prevailing market conditions. Thus it will be a demand driven issuance to satisfy the needs of the investors”.  Mr Shankar congratulated MAS for being the first central bank of a non-Muslim majority jurisdiction to come up with an ongoing local currency sukuk issuance Programme. He added, "I hope this will become an important building block for the promotion of Islamic banking in Singapore."
4   His Excellency Abdulla Hasan Saif, Chairman of IB Asia, said "Not only will this initiative bolster Singapore’s efforts in becoming a leading Islamic financial centre, it may very well become a case study for other countries with similar financial sector requirements and aspirations.  The Islamic Bank of Asia is looking forward to utilising the programme for regulatory requirements, to facilitate the development of a range of Sing-dollar, Shariah- compliant products that will cater to our customers' needs."  His Excellency Abdulla Hasan Saif announced at the signing ceremony that IB Asia will be placing an order for the sukuk shortly, making IB Asia the Programme’s first investor.

5   MAS also announced today that with immediate effect, Singapore-based banks may enter into Murabaha interbank placements and offer Ijara Wa Igtina financing. These changes will enable the financial institutions offering Islamic finance a wider range of instruments in their management of liquidity and in their matching of assets and liabilities.  These changes have been made after detailed consultation with the industry. MAS will continue to work closely with the industry to ensure that our regulatory and tax framework, and other necessary infrastructure and conditions are in place to foster good risk management and the further growth of Islamic finance in Singapore.