AMMAN -- Prime Minister Abdullah Ensour on Thursday acted as patron at a ceremony to launch a historic piece of legislation regulating the Islamic sukuk (finance bonds).
The prime minister described the Islamic Sukuk Law as a milestone in Jordan's financial and economic history, noting that launching these items of legislation is the final step in building the pillars of finance compatible with Sharia.
"The three capital institutions [the Jordan Securities Commission (JSC), Amman Stock Exchange (ASE) and the Securities Depository Centre] are now ready to receive orders for issuing sukuk for the public and private sectors," Ensour announced.
The premier said the law is prone to "open new horizons" by encouraging people to invest savings through Islamic financial instruments.
"If we look deeply into the national economy, we will see that many circumstances have led to increased consumption and spending, and less savings and investments," Ensour said, adding that sukuk can be an effective means of investment that is "in line with our religion and traditions".
This would provide citizens with a new saving source that allows them, regardless of their incomes, to be partners and investors in income-generating projects in the private and public sectors, the premier noted.
He also noted that the government will use sukuk to finance its productive projects, especially those in partnership with the private sector.
The premier expressed hope that Islamic sukuk issuances will contribute to the growth of the national economy to overcome poverty and unemployment, in addition to providing a new umbrella for banks and Islamic insurance companies to invest their extra liquidity in these sukuk.
Sukuk (Arabic plural of sak, which means financial document or bond) have gained wide popularity recently, and become a preferred way to finance government projects and expand corporate operations, with the emergence of large banks that employ sukuk on international markets.
Many of these banks have established units to serve the Islamic finance markets. As a result, investments in Islamic bonds have grown in value to several trillions of dollars and are still gaining ground.
JSC President Mohammad Hourani said issuing sukuk at this time may have a great role in encouraging individuals to use their savings to finance projects, which would, in turn, reinvigorate the ASE.
© Jordan Times 2014
