Sukuk can be game-changer for Bangladesh

Experts on Wednesday stressed on the role of Sukuk as a game-changer in project financing in Bangladesh.

They were speaking at a seminar titled “Sukuk: The New Investment Opportunity in Bangladesh” on the second day of a four-day roadshow organised by the Bangladesh Securities and Exchange Commission (BSEC) at the Park Hyatt Hotel in Dubai.

A Sukuk is an Islamic financial certificate, similar to a treasury bond, which complies with Shariah laws.

The issuance of Sukuk bonds can create opportunities for investors from Malaysia and Dubai to look into Bangladesh as another potential investment destination, experts said.

Md Iqbal Hussain Khan, consul general of the Bangladesh Consulate in Dubai, was the chief guest at the event.

BSEC Chairman Shibli Rubayet ul Islam chaired the event, while Ershad Hossain, managing director and chief executive officer of City Bank Capital, was the keynote speaker at the event.

Experts also recommended the simplification of the Sukuk issuance process, streamlining regulatory procedures and offering tax incentives for both issuers and investors with regards to the Sukuk market.

An investor-friendly legal jurisdiction is imperative for local and foreign investors, Hossain said.

The Sukuk industry remains one of the main components of the Islamic finance system, said Ali Ahsan, head of Islamic origination of Standard Chartered Bank.

“Now, mega projects are developing in Bangladesh. There is a need for more investment. The demand for this investment can be met through Sukuk bonds.”

He urged prospective investors, especially those from the UAE, to invest in Bangladesh's capital market.

"Long-term finance for the development of the private sector is necessary. We are mostly dependent on commercial banks for any financing but banks are not supposed to provide funds for the long term," Islam said.

There are many opportunities to launch Sukuk Bonds in Bangladesh. It is possible to get good returns from this bond, he added.

The first Sukuk in the country was issued by the Bangladesh Bank on December 28 last year for financing safe water supply projects across the nation.

The government had collected Tk 4,000 crore for the projects through an auction on the day. Investors submitted bids worth Tk 15,153 crore during the auction.

Khondoker Kamaluzzaman, BSEC commissioner; Mohammed Mahtabur Rahman, chairman of Haramain Group; Muntakim Ashraf, director of DSE; Rahmat Pasha, CEO of UCB Stock Brokerage; Mahbubul Alam, executive director of BSEC; Parvez Tamal, NRBC Bank chairman and others were also present at the programme.

The stock market regulator has organised the roadshow in Dubai at UAE from February 9-12 to attract foreign investors, and non-resident Bangladeshis (NRBs) willing to invest in the country's bourses. 

UCB Stock Brokerage, formerly UCB Capital Management, also launched a digital booth at the event, which the BSEC chairman inaugurated.