The Nairobi Securities Exchange (NSE) has formally inaugurated the Linzi Sukuk bond into the unquoted securities platform, in an occasion graced by President William Ruto at the Exchange building.
The Linzi Sukuk bond is the first Islamic and sharia-compliant finance asset listed on the bourse, a bold statement on the commitment to explore broader ranges of market investment. In May 2023, the Linzi Sukuk bond was first floated, raising the targeted KSh3 billion, out of the KSh3.02 billion bids received.The bond is also a residential-based security seeking to facilitate the construction of 3,069 affordable housing units, with a maturity period of 15 years and an 11.13 % internal rate of return.“The listing of the first Sukuk on the NSE PLC not only highlights the growing demand for ethical and inclusive investment options but also paves the way for further expansion of Shariah-compliant products in the Kenyan market opening avenues for more investors to participate in the growth and development of our economy,” said the CEO of NSE, Frank Mwiti.
In September, the Capital Markets Authority approved the issuance of the Sukuk bond by Linzi Finco Trust. This admission cements Islamic based investing with the current regime eyeing an Islamic Finance Board.
Sukuk intends to provide options for conventional debt financing and resource mobilisation, which will boost economic growth and prosperity. The bond not only envisions to diversify investment portfolios, but also intends to expand ethical financing options in the market. Proceeds from the bond will go into financing several residential projects for the Kenya Defence Force (KDF).
“The introduction of the Linzi Sukuk into our market unlocks new avenues for investment, expands our financial toolkit, and paves the way for a more inclusive and resilient economy,” said Sheikh Ibrahim Lethome, Chairperson CPF Salih Advisory Council.
Sukuk bonds entail financial instruments that comply with Shariah principles and provide investors with a share of the profits generated by the underlying assets.
“Our commitment extends to the privatisation of government owned enterprises as part of our broader economic liberalisation policy. This will not only stimulate market activity but also support the government’s strategy to divest its stakes in key corporations, enhancing overall market dynamics.” President Ruto said.
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