(Sukuk.net Press) The GCC and Asian Sukuk market is once again showing activity and brimming with cautious optimism.
Growing market confidence as underlined by a number of planned sovereign Sukuk issuances in the GCC; a huge improvement in the average price of and yield from Sukuk over the last four months, and the benefits of economic and fiscal stimulus packages, is expected to kick start the Middle Eastern Islamic debt and capital market later this year.
Several banks and allied services concur that activity in the Islamic debt market is beginning to pick up and that they are now advising a number of funds and investment banks on investment structures to invest in Sukuk.
In the UK, the Finance Bill 2009 which is currently going through its final stages in the Houses of Commons and Lords will introduce relieving measures for stamp duty land tax, capital gains and capital allowances rules for land transactions involved in connection with the issuance of Sukuk. HM Treasury and the Financial Services Authority are also soon launching the results of a consultation regarding measures to facilitate the issuance of corporate Sukuk out of the UK.
Similarly the impact of several Shariah resolutions on Musharaka and Mudaraba Sukuk, Tawarruq and Al-Bai Bithaman Akil (ABBA) are still reverberating in the sector.
Sukuk and Islamic capital markets offer huge opportunities - To help market players and any other interested parties learn more about the structuring of, the legal and Shariah issues, and the technicalities of Sukuk, ICG-Events, the organizers of the London Sukuk & Capital Markets Summit 2009, invites participants to sign up for a unique Sukuk Master class titled Understanding Sukuk - Issues, Structuring, Innovation which will be held on 1 July 2009 at the London office of Ashurst LLP.
The master class will be conducted by a team of top experts in various fields relating to Sukuk and Islamic Capital Markets. (see programme and speaker faculty links). The master class precedes the main Sukuk Summit which will be held on 2-3 July 2009 at the Radisson Hotel in London. Please visit the event website at www.sukuksummit.com for further information.
While the masterclass will look at several generic issues relating to Sukuk, there will also be a special focus session entitled: Sukuk & Real Estate - Implications of Tax, Capital Giants, & Other Allocation Issues; Assessment of the Provision for Alternative Investment Bonds in the 2009 UK Budget (To be included in the Finance Act 2009).
This focus will look to examine the impact of the latest legal developments relating to issuing sovereign and corporate issuances in the wholesale sterling market and has particular relevance and positive implications for the Real Estate Sector.
Real Estate Sector set to benefit from Sukuk Legislation
Under draft legislation published for consultation in the run-up to the Budget, the reliefs will broadly apply where land is transferred by one person to a bond-issuer ("the first transaction") to be held by the latter for the purpose of the issuance of an alternative finance investment bond until the termination of the bond (no later than 10 years) at which time ownership of the land reverts back ("the second transaction"), and, for the purpose of generating income or gains for the bond, the bond-issuer and the original owner enter into a leaseback agreement.
The first and second transactions are to be relieved from stamp duty land tax and tax on chargeable gains - subject to satisfying six conditions. A pre-existing stamp duty land tax relief for sale and leaseback arrangements is intended to provide a complete exemption for the acquisition of the leaseback. The originator will also retain the right to claim capital allowances. In effect, the transfer will be ignored and for tax purposes the originator will continue to be treated as holding the assets.
According to Deloittes, the UK Government continues to take steps towards creating a level playing field between Islamic and conventional finance and promoting the UK as a centre for Islamic Finance.
"... we note that the principle of relieving the first transaction may arguably place Sukuk transactions at an economic advantage compared to issuances of normal asset-based securities which can attract stamp duty land tax on the sale element of the transaction, which, subject to satisfying conditions, shall be relieved under Sukuk."
The changes will affect UK corporates wishing to raise real estate backed funding in a Shariah- compliant manner in order to access a wider investor population. As such the timing of this masterclass could not be more opportune given the revival in the Sukuk market and the potential for a spate of UK and EU corporate Sukuk issuances going forward.
The Islamic capital markets is indeed also poised to play an important role in the next stage of development of the global Islamic finance sector per se which has better withstood the vagaries of the credit crunch and the global financial market.
The Sukuk master class is a bespoke event and tailor-made to teach you the essentials and fundamentals of understanding and structuring Sukuk and Islamic capital markets products conducted by acknowledged experts in their fields, and thus opening up a potentially US$500bn market to your institution or organisation. Can you afford not to be part of this unique Islamic capital market education event!
Places for both the workshop and summit are now limited. Register today to confirm your place and avoid disappointment!
About ICG Events
ICG-Events is dedicated to organising focused events, investor forums and conferences in creating a better awareness & understanding of the Islamic finance industry. Our aim is to always procure the highest calibre speakers who have the most current knowledge of the issues in their specialised areas of practice and to provide a significant value added return to delegates.
