Bank Muscat's Meethaq window focuses on project finance

25/05/2017 07:29 AST

Bank Muscat's Islamic banking window Meethaq is trying to tap the project finance market as part of an initiative to diversify risks. "We have signed agreements in financing a medical project and a poultry project recently. Some of these projects have off take arrangements with countries like India. We evaluate our risk carefully and the opportunities are immense," said Sulaiman Al Harthy, deputy chief executive officer - Islamic Banking - at Bank Muscat.

He also said that the bank's maiden sukuk issue for OMR25 million has a green shoe option for another OMR25 million, in case of oversubscription.

The OMR25 million sukuk issuance from Meethaq, open for subscription from May 21 till June 1, is part of a larger OMR100 million sukuk programme for retail and institutional investors.

The issue has an indicative profit rate of 5 per cent per annum with a tenor of five years. "Meethaq is proud to launch Oman's first sukuk programme, which is set to transform the landscape of Islamic banking in Oman. The Sharia-compliant Meethaq Sukuk offers a good investment opportunity to investors who are looking for stability, growth and long-term prosperity. Most sukuk issued till date in the Sultanate have been targeted at institutional investors. Reiterating the core Islamic banking values, Meethaq believes in spreading wealth for the progress and prosperity for all and is delighted to offer the Meethaq Sukuk to the general public," said Al Harthy.

Meethaq Islamic Banking hosted media and customers to highlight the features and benefits of the sukuk issuance. The event at the Bank Muscat head office evoked huge response from prospective investors. Similar customer meet was also held at Nizwa and a meeting is scheduled in Sohar on Thursday.

The face value of Meethaq Sukuk is OMR1 per certificate, priced OMR1.002 per certificate, including the issue expense of 2 baisa per certificate. The public offer is open to all Omani and non-Omani individuals as well as institutional investors from May 21 till June 1.

The minimum subscription is for 1,000 certificates and multiples of 100 certificates for more than 1,000 certificates. There is no limit for maximum subscription. The sukuk application forms can be obtained and submitted at the network of collecting banks comprising Bank Muscat, Meethaq and Bank Nizwa branches.

Meethaq is the first Islamic banking entity to obtain CMA approval for a sukuk issuance targeting retail investors in Oman. Investors applying for Meethaq sukuk are required to have Investor Account with Muscat Capital and Depository Company (MCD). The sukuk allotment is expected to be announced on June 18 after which the sukuk will be listed on Muscat Securities Market (MSM).

Under the OMR100 million programme, Meethaq will issue sukuk in various tranches from time to time, to fund its growth plans and expansion of Islamic banking services across the Sultanate. The sukuk will be listed on the bond and sukuk market of Muscat Securities Market (MSM), thus offering liquidity.

Within just four years of operations, Meethaq has attained the leading position in the Islamic banking industry in Oman. Meethaq Islamic financing receivables rose to OMR902 million as of March 31, 2017 compared to OMR665 million in the same period of 2016. Islamic banking customer deposits amounted to OMR780 million as of March 31, 2017 compared to OMR678 million reported for the same period in 2016.

Meethaq has adopted the best practices in Islamic banking and finance worldwide to combine a robust model which protects customers and compliments the Islamic banking industry. Every Meethaq product goes through the process of Sharia compliance certification by the Sharia Supervisory Board and is created in line with the guidelines of the Central Bank of Oman.

Times of Oman