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Published On:12 December 2011
Posted by Indian Muslim Observer

South Africa Looks For Adviser on Islamic Bond Issues

By Lorys Charalambous

Within the government’s programme to encourage foreign direct investment in South Africa, the National Treasury is inviting banking institutions to submit proposals for the provision of advisory services for the structuring and issuance of a South African government Islamic bond in the domestic and international markets.

The invitation is in line with the National Treasury’s intention to diversify its funding and investor base. “There is a great interest in the sukuk market and this is the first step towards meeting the growing appetite for government backed Shariah compliant investments,” said Lungisa Fuzile, the National Treasury’s Director General.

The government’s 2011 Budget provisions proposed the enactment of a tax framework to allow the government to issue Islamic bonds. Amendments to the country’s tax code will essentially allow for asset-based financing with the yield giving rise to tax that is equivalent to interest. Such bonds will serve as the standard for risk-free Islamic financing within South Africa.

Interested service providers are expected to submit proposals by the close of business on December 21, 2011. Shortlisted bidders will be informed by January 20, 2012.

(Courtesy: Tax-News)

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Posted by Indian Muslim Observer on December 12, 2011. Filed under , . You can follow any responses to this entry through the RSS 2.0. Feel free to leave a response

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