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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
Thank you
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