Sukuk: Key to boost business segment


(From left) Kuskop deputy secretary-general (policy and surveillance) Noor Afifah Abdul Razak, its secretary-general Datuk Seri Suriani Ahmad, its deputy minister Senator K. Saraswathy, UDA Holdings Bhd president and chief executive officer Datuk Mohd Salem Kailany, together with RHB Investment Bank Bhd managing director and chief executive officer Ganesh Sabaratnam at the UDA Sukuk Townhall held at Aloft Hotel, Kuala Lumpur Sentral.

SUKUK is showing continuous growth and development in recent years as the Islamic financial instruments are proving to be productive forms of investment.

Award-winning property developer, UDA Holdings Bhd (UDA), which has RM3.7bil in total assets, is launching RM1bil worth Sukuk Wakalah through two programmes for its investors.

The two are Islamic medium term notes (IMTN) programme (which will involve a tenure of 20 years) and Islamic commercial papers (ICP) programme (will involve a tenure of seven years).

UDA, an agency under the Entrepreneur Development and Cooperatives Ministry (Kuskop), diversified its business in property development, property investment, hospitality, and facilities management.

At the UDA Sukuk Townhall held at Aloft Hotel, Kuala Lumpur Sentral, UDA Holdings Bhd president and chief executive officer Datuk Mohd Salem Kailany, said UDA would issue Sukuk Wakalah as a strategy to further strengthen its role in its business segment, as well as to support the aspirations and needs of the ministry.

‘UDA would issue Sukuk Wakalah as a strategy to further strengthen its role in its business segment, as well as to support the aspirations and needs of the ministry,’ says Mohd Salem.‘UDA would issue Sukuk Wakalah as a strategy to further strengthen its role in its business segment, as well as to support the aspirations and needs of the ministry,’ says Mohd Salem.

He shared that funds from the issuance of Sukuk Wakalah would be used such as working capital to finance commercial, housing, industrial development and waqf projects.

In addition, he explained that funds from this Sukuk Wakalah will be utilised by UDA Group Asset Management to empower solar energy applications in buildings maintained by UDA and further strengthen the use of renewable energy to be more environmentally friendly.

UDA training programme protege Aina Asyikin Said checking on UDA Sustainability Roadmap at the event.UDA training programme protege Aina Asyikin Said checking on UDA Sustainability Roadmap at the event.

“In line with global developments that emphasises sustainability in every step of the organisation, the issuance of UDA Sukuk Wakalah also adopts the Sustainability Sukuk Framework which was issued by the Securities Commission Malaysia,” he said.

In particular, it includes the ASEAN Green Bond Standards, ASEAN Social Bond Standards, and ASEAN Sustainable Bond Standards. Besides that, it is also aligned with Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines issued by the International Capital Market Association, he pointed out.

MARC Ratings Bhd has been engaged by UDA as an independent external reviewer for its Sustainability Sukuk Framework and it has assigned a “Gold” assessment for it. The Framework has been established to set the guiding principles for UDA’s issuance of Islamic financing instruments for specific eligible projects.

UDA recent awards displayed at the event.UDA recent awards displayed at the event.

“Last year, UDA successfully won 16 awards in its various business aspects, which shows that UDA is always committed to providing the best in each of its business segments.

The value of UDA’s development projects implemented until the end of September last year is RM494.8mil. UDA also has a reserve land of 410.4ha with an estimated market value of RM2.6bil.

“We hope that the issuance of Sukuk Wakalah will increase investment activities to targeted groups, apart from strengthening the role of UDA to work together with the Government and the ministry contributing to the country's economic growth based on Malaysia Madani development (concept),” he added.

UDA's focus in developing residential development and commercial projects in urban areas is proof of its support for the government's social policies, says Ewon.UDA's focus in developing residential development and commercial projects in urban areas is proof of its support for the government's social policies, says Ewon.

Entrepreneur Development and Cooperatives Minister Datuk Ewon Benedick, who was in Sarawak for his working visit, attended the event via virtual.

In his speech, Ewon said, “As a country that is recognised as a leader in development of Islamic finance solutions at the global level, Malaysia is always in the top group in the world sukuk market.

“UDA's focus in developing residential development and commercial projects in urban areas is proof of its support for the government's social policies. This effort is important considering that issuance of Sukuk Wakalah involves sustainability elements that requires UDA to meet all the criteria of the Sustainability Sukuk Framework that has been set.

“UDA's ability to achieve the mandate that has been given to the company is important to ensure the ecosystem of micro, small and medium enterprises to continue to grow,” he explained.

“To those business analysts present today, I request you to evaluate the issuance of Sukuk Wakalah fairly and openly because it will be the beginning of something bigger not only to UDA but to the people who will be enjoying various benefits from business activities that will be carried out,” he added.

RHB Investment Bank Bhd is the main adviser for the implementation of this Sukuk Wakalah.

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