The Nigerian Exchange (NGX) has reiterated its commitment to the development of Islamic finance as the Exchange admitted TajBank Limited’s N10 billion Sukuk Mudarabah for trading on its platform.
Speaking at the commemorative closing gong ceremony to mark the listing, Divisional Head, Capital Markets, Nigerian Exchange (NGX), Mr Jude Chiemeka said the Exchange remains committed to diversifying the capital market by providing broad portfolio of securities for various categories of investors.
He said NGX would continue to support companies and governments by providing a platform of choice for capital raising and linking them with a diverse pool of investors.
“The Exchange is also committed to the development of Islamic financing in the Nigerian capital market and continues to implement initiatives to deepen its offerings,” Chiemeka said.
He commended the efforts of TajBank’s leadership and the parties to the issue: Greenwich Merchant Bank, Lead Issuing House; 117 Capital & Buraq Capital, Joint Sharia Advisers; and United Capital, Brokers, on the transaction.
TajBank’s N10 billion 15 per cent Series 1 Sukuk Mudarabah bond has both features of equity and debt. The N10 billion Sukuk Mudarabah Issuance is an additional Tier 1 capital with loss-absorbency and a first-of-its- kind in Nigeria which is being raised under the TajBank N100 billion Sukuk Mudarabah Programme aimed at strengthening the bank’s capital adequacy ratio.
Chief Executive Officer, TajBank, Hamid Joda reiterated the strategic importance of Islamic financing and how it can drive national development.
He also thanked NGX for its support and pledged to continue to collaborate with the Exchange for the development of Islamic finance in the country.
According to him, the Sukuk bond issuance by TAJ Bank is a very important milestone in the history of Nigeria’s capital market. ”I believe that after this issuance, we will see a number of companies in the Nigerian market coming out to issue Sukuk bonds and that will lead to the deepening of the non-interest mar ket and eventually economic development of Nigeria,” Joda said.
oda noted that the bank’s issuance received interest from both retail and institutional investors, resulting in a subscription of 113.6, per cent, adding that the oversubscription of the Issuance demonstrated that the investment culture in the country is still vibrant and there is sustained confidence in Nigeria’s path to economic recovery and stability.
“Millions of investors have been yearning for non-interest or Islamic instrument. We believe this is an opportunity for them to invest in such an instrument. The funds raised will be deployed into high-impact sectors that create jobs in Nigeria’s economy and in that way, it will have high-impact opportunities for millions of Nigerians.
“I believe with this move; we have inspired many other corporates in the financial space to come on board and issue Sukuk for greater development of our dear country,” Joda said.
Chairman, TAJBank, Alhaji Tanko Gwamna said the listing of the Corporate Sukuk was what the capital market needs to enhance liquidity and further grow Nigeria’s economy.
He said the bank was considering investing the net proceeds from the Sukuk in the manufacturing and agriculture sectors.
”Manufacturing sector is the only sector that can take most of the youth out of the street and keep them engaged. Also, we are funding agriculture production and its value chain from start to finish. These two sectors are where we wanted to fund the Sukuk issuance.
”The listing on the Exchange is for investors to trade in the Sukuk and diversify their investment.
“We are setting the trend and I’m sure a lot of corporates will come along. We are making more offerings because the market is in need of corporate Sukuk. It was a transparent exercise and people can trade with our Sukuk and it will offer more liquidity for economic growth,” Gwamma said.
He added that the bank would soon be back in the capital market to raise more funds.
Commonly referred to as Islamic Bonds, Sukuk – a non-interest-bearing bond- has helped government diversify its sources of funding while offering ethical investors an opportunity to invest in government-issued securities. The instrument has not only helped the government achieve a higher level of financial inclusion but has served as a reference for pricing Sukuk issued by other bodies, especially the private sector.
SOURCE: THENATION
