Sokouk Al-Intifaa and the Securitization Market. By Meshal Kh. Al-Ameri Munshaat Real Estate...

Sokouk Al-Intifaa and the Securitization Market.

By

Meshal Kh. Al-Ameri

Munshaat Real Estate Projects Co.

June 2004

Comprehensiveness Flexibility Disciplined criteria Ethical

Islamic Economy – Characteristics

Significant growth Adaptability to current market trends.high growth rate reaching 15% p.a. market size of about US$630 Billion

Islamic Economy – Market Size

Industry products and offerings are gaining the trust very rapidly.Non Muslims accepted Islamic Structured Products. Market growth acceded Product growth rate.

Islamic Economy – Over View

Recent Developments

2001 Bahrain Monetary Agency- BMA issued its first SokoukGovernment of Qatar issue of US$700 million Sokouk Immar US$50 Milion.Tabreed issue . US$ 100 Million

Islamic Economy – (Securitization)

“a device of structured financing where a pool of assets cash flows over time,are transferred to investors through a mean of ownership of these Assets, either with or without the support of further collaterals”

Islamic Economy – Sokouk Basic Definition

Financing Receivables of IFIs

Mudaraba1%

Musharaka2%

Int'l Murabaha

(commodity backed)

29%

Others15%

Leasing3%

Murabaha38%

Istisna'a12%

Islamic Economy – Receivables distribution

Source :- Capital Intelligence 2001

Specialized International Real Estate Investment Company.

Dedications Structure and develop Real Estate instruments that are Sharia compliant.

First to Offer the concept of “Sokouk Al-Intifa’a”.

Munshaat Real Estate Projects – Mission

A Blend of financial engineering combined with Real Estate Assets

derivative instrument of normal Sokouk

issuer disintegrate its right of use of identifiable asset over a identifiable period of time into specific units (Sokouk Al-Intifa'a) and transfer these rights to buyers (Sokouk Holders).

Holders of the Sokouk will in turn have the right to benefit from their these Sokouks by utalization, investment , or selling them to others.

Sokouk Al-Intifa’a – Definition

Sokouk Al-Intifa’a is a blend of two forces: structured finance and; Real estate Assets.

Sokouk Al-Intifa’a is a structured Instrument: Security is not the issuer of the Sokouk, but in the specific real estate asset or cash flows of such an asset.

Sokouk Al-Intifa’a – Definition

Sokouk al-Intifa’a is a product of multiple usage.

Can be used as a raw components to develop financial instruments around it.

Can be invested with no cape on returns

Can be sold with upside potential.

Sokouk Al-Intifa’a – Definition

Sokouk Al-Intifa’a is a way for commoditization.

Sokouk Al-Intifa’a is a product for integration .

Sokouk Al-Intifa’a is a product of de-construction of a real estate asset components.

Sokouk Al-Intifa’a – Definition from financial Percpective

It is a legal deed of a lease hold/ownership right of accommodation, designed to be a long term lease hold instrument for end users without need to the full legal ownership of a Real-Estate .

•It is tailor designed product to the need and demand of different kinds of end users in different markets.•It is a retail consumer product for end users as well as an investment instrument for intermediaries and investors. •It is a strategic instrument with a good potential downstream business. •It is designed to perform in accordance with Islamic Sharia principles. •It offers a suitable alternative to conventional ownership to users of properties mostly of business and touristic nature.

Sokouk Al-Intifa’a – Features

Advantages of Sokouk Al-Intifa’a Scheme-:

a) Guaranteed Accommodationb) Effective Utilizationc) Flexibility in Used) Re-sale Optiond) Genuine Savinge) Fixed Costf) Sub-lease Option

Sokouk Al-Intifa’a – End User Advantages

Marketability

Merchantable quality

Wide Distribution 

Sokouk Al-Intifa’a – Financial Institutions Advantages

Promotes savings

Reduces costs

Diversifies risks

Focuses on use of resources, and not their ownership

Economic Impact of Sokouk Al-Intifa’a

International Sales and Marketing. (Retail Customers)

Customer services centers.

Facility Management through international Hotel Operators.

Exchange Topology to enable trading and exchange of Sokouk.

Sokouk Al-Intifa’a – Infrastructure Support

For more information or to get a copy of this presentation go to

www.munshaat.comContact Details

Meshal Kh. Al-Ameri

Tel (965) 246-7181

Fax (965)246-7190

m.alameri@munshaat.com

Thank you

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