Investment Funds With Islamic Sukuk For Algerians

The Supreme Islamic Council is studying the possibility of launching financial Sukuks sold by investment funds that adopt Sharia-compliant bond-like instruments for the first time in Algeria.

This procedure will be applied in coordination with the Ministry of Finance, which will amend the laws framing the activity, according to what is commensurate with this new type of financing, and also with the Committee for the Regulation and Control of Stock Exchange Operations “COSOB”, which is the authority for regulating the financial market in Algeria.

This step is considered the third stage of popularizing the Islamic financial industry in Algeria, which started with the generalization of Islamic banking through all public banks and some private banks.

Preliminary results reveal that most of the banks succeeded in saving large amounts within two years, and the Bank of Algeria will celebrate next August, the 24th anniversary of the launch of Islamic banking, and in parallel with that, the proceeds of financing and saving will be revealed.

At the beginning of this year, the Algerian authorities rushed to launch Takaful insurance, which is the second phase of the financial industry by announcing two new companies, supporting the insurance sector, the first owned by all banks and public insurance companies, and the second a new independent branch of an insurance company active in the market, while the third stage of the project will be through the launch of Islamic financial instruments, to complete the Sharia-compliant financial industry project.

Chief Executive Officer of Algiers Stock Exchange, told Echorouk that the Islamic Sukuk project is currently still at the level of the Committee for the Regulation and Control of Stock Exchange Operations “COSOB”, which has all the data and details regarding the launch dates and deadlines for offering this financial product to customers, while he added that the project is still under study.

Hicham Attar, CEO of AOM Invest, told Echorouk that he will be the owner of the first project of the approved investment fund for Sharia-compliant instruments in partnership with the Supreme Islamic Council, where the file will be officially deposited at the “COSOB” office next August, to start marketing the Sukuk that will be offered for sale to customers during 2023 as a maximum, and its technical form, i.e. the number of Sukuk and the value of each instrument, will be determined, after completing the legal study and matching this project with the laws, which is under study by the Supreme Islamic Council and the Ministry of Finance.

The company, “AOM Capital” branch, will be the first investment fund to finance tourism projects for the first time in Algeria, according to Sharia-compliant instruments, and approved by the Supreme Islamic Council. This fund replaces the previous project for Islamic bonds, which has never been launched until today, after two years of study, which included selling two million Islamic bonds for 1,000 dinars to customers in return for certain profits in a tourism project.