RIYADH, 8 October 2007 — The Saudi Capital Market Authority has authorized Jadwa Investment to launch a Global Sukuk Fund. The sukuk fund achieves a key milestone in the Shariah-compliant investment management industry as it fills the gap of fixed income asset class.
Ahmed Al-Khateeb, managing director & CEO of Jadwa Investment, said “Jadwa aims to provide innovative investment solutions to clients, at the same time ensuring each product rolled out adheres to Shariah standards”.
Fadi Tabbara, vice president asset management, added that “Jadwa Global Sukuk Fund is an important addition to the product range in Jadwa Investment’s offering, as it would provide Islamic investors with an opportunity to invest in fixed income instruments and complete the asset allocation model of their investment portfolio in compliance with Shariah”.
Each Sukuk in which the fund invests will first be reviewed and approved by Jadwa’s Shariah Committee to ensure that the structure of the underlying sukuk invested by the fund complies with Shariah principles.
During the last 5 years, the Sukuk market has witnessed exceptional growth, with the current total amount outstanding in excess of $80 billion. The pace of sukuk issuance globally has increased tremendously during year 2007, and sukuks in pipeline for launch during 2008 are estimated at around $50 billion plus.
Sukuks are alternate for bonds, but are structured in compliance with Shariah principles. There are a number of underlying Islamic concepts used to structure Sukuks, and Ijara and Musharaka are two of the more widely used Islamic structures in the Sukuk industry.