SALES of premier Sukuk bonds, Islamic compliance, have exceeded the targets by 61 per cent in two months, thanks to the increased investors trust following the Sharia law in the capital and bond market.

The bond sales reached 1.94bn/- between April and May this year up compared to 1.2bn/- which was the primary target.

“This success is due to the increased trust of investors plus the contribution of the ongoing investment education provided to the public through the capital and bond markets authority,” said Mr Nicodemus Mkama, Chief Executive of Capital Markets and Security Authority (CMSA).

Mr Mkama said that yesterday during the handover of certificates to the bond’s investors in Dar es Salaam.

The amount raised will be used to establish the health facility of Premier girls secondary who is the originator of the bond.

He added that the sales contribute to the implementation of the Financial Sector Development Master Plan for 2020/21 and 2029/30 which focuses in facilitating access to financial resources for the implementation of development projects in the public and private sectors to build a competitive economy.

Globally, the issuance of Sukuk bonds which are Islamic compliance has been increasing at a rate of 15 to 20 per cent per year and its assets up to date are worth more than 2.0 trillion US dollars.

Currently, more than 20 countries including Europe, Asia, the Middle East and Africa have issued the bond led by the UK, Malaysia and the United Arab Emirates.

Other countries are Bahrain, Indonesia, Iran, Qatar, Kuwait, Pakistan, Saudi Arabia, Singapore, Somalia, Turkey, Brunei, Hong Kong, Egypt, Ivory Coast, Senegal, Gambia, South Africa and Nigeria.

Additionally, the response shown by the investors of the Premier Sukuk bond signifies positive progress in the service that until now, twelve Sukuk bonds have received CMSA approval and sold to various investors, including retail investors, groups, institutions and social security funds.

He added that these bonds have so far enabled the acquisition of a total capital of 79.32bn/- compared to the 49.2bn/- expected to be collected, equivalent to a 161 per cent success.

Yusra Sukuk Company’s Chairman Sheikh Mohammed Issa, the deal’s lead arranger and advisor, said the issuance of the premier bond is an effort to enable the school which is located at Bagamoyo in the Coast Region to fulfill their goal after encountered with various challenges.

“The school had previously borrowed money from a certain bank and paid a lot in return, so to avoid that they has to invest in bonds and through the initiative of the People’s Bank of Zanzibar (PBZ) under its Ikhlas unit agreed to invest in and today we are witnessing a success,” said Mr Issa.

Additionally, The Dar es Salaam Stock Exchange (DSE) Acting Director Mary Mniwasa said despite the presence of more than 10 Sukuk bonds in the country, only one of those types is registered in the DSE market.