Nov 13 (Reuters) - The Saudi Arabia-based Islamic Corporation for the Development of the Private Sector (ICD) hopes to expand its capital market activities and attract new corporates to issue sukuk, or Islamic bonds, its chief executive told Reuters.
The ICD, the private-sector arm of the Islamic Development Bank Group, has sought to help develop Islamic finance across its 53 member countries and in recent years has focused its work in Africa and central Asia.
While ICD has advised several governments on their debut sales of sukuk, including Senegal, Jordan, Nigeria and Ivory Coast, it hopes to attract private companies to the market as well, chief executive Ayman Sejiny said in an interview.
“The next natural step is to identify potential corporates to issue sukuk. Sukuk can help diversify their investor base, so we want to facilitate hard-currency sukuk issuance in those regions.”
Such issuance can help private companies attract new foreign investors and allow local Islamic financial firms to invest their excess liquidity in sharia-compliant instruments that are often scarce in those markets, said Sejiny.
The ICD is currently in discussion with several CIS (Commonwealth of Independent States) countries to help them issue sukuk, Sejiny said without elaborating.
“The CIS region is gaining momentum in Islamic finance. We are likely to see sukuk issuance in the coming years, possibly by corporates and central banks.”
In September, the ICD signed sharia-compliant financing agreements with six banks in Uzbekistan.
Sejiny joined the ICD last month after more than 24 years of work in investment and corporate banking, taking over from Khaled Al-Aboodi who stepped down in February after a decade heading the multilateral body.
While much of ICD’s focus areas would remain the same, Sejiny said he also planned new initiatives to introduce digitisation such as blockchain technology to Islamic financial services.
Such efforts could be important in Muslim-majority countries that still lack wider access to Islamic financial services, which follow religious principles that forbid interest and gambling.
Several Islamic financial firms are adopting digital tools such as blockchain to help lower costs and speed up sharia-compliant transactions. (Reporting by Bernardo Vizcaino; Editing by Eric Meijer)