Al-Roshood: KFH Primary Dealer in IILM, Global Market Maker
“Kuwait Finance House (KFH) volume traded in the Sukuk market outpaced USD 4.4 Billion for the year 2015, an increase of 46% over the same period last year” said Abdulwahab Essa Al-Roshood, Acting Chief Treasury at KFH. He indicated that such volume is yet another outstanding achievement to be added to KFH performance as a primary dealer and a global Sukuk market maker.
Al-Roshood added, in a press release that the bank managed in 2015 to achieve remarkable development in the Sukuk at the regional and global levels as it motivated and encouraged a number of conventional banks to enter the market. Also, KFH managed in 2015 to occupy a great share of the secondary market deals of short-term Sukuk by International Islamic Liquidity Management, IILM since KFH was nominated “Primary Dealer in Kuwait”. He emphasized that these deals have contributed significantly to the increase of liquidity and support of Islamic financial markets. Sukuk boost Islamic finance, strengthen its pillars and highlight KFH role as a pioneer in this market.
Al-Roshood stated that Sukuk are the most significant and powerful low risk investment finance tool which contributes effectively to the process of encountering liquidity crises. Sukuk are characterized as instruments of high liquidity, active secondary market, flexibility and good returns. Sukuk play as a significant investment outlet for banks and an effective tool to manage liquidity in accordance with CBK standard liquidity ratios. In addition, Sukuk contribute in increasing shareholders profit.
In terms of Basel III accord and its repercussions on the market, Al-Roshood pointed out the new Capital Adequacy Ratio (CAR) applied terms in 2015 impacted the issuance this year as many banks expressed their interest in issuing Sukuk of unlimited duration or capital-boosting Sukuk in a bid to strengthen capital which positively affects the CAR.
He highlighted that Sukuk contribute significantly in financing income generating and productive projects, thus activating economic growth, indicating several countries worldwide including Kuwait voice interest and mull deliberately issuing sovereign Sukuk in an attempt to bridge deficit in their budgets resulting from the drop of oil prices.