On 28th May 2014, Crowe Horwath hosted a seminar on IPO and Sukuk at Waldorf Astoria Palm Jumeriah. The seminar started off by Recitation of Holy Qu’ran by Mr. Khalid Mehmood, Welcome address by Dr. Khalid Maniar, a brief introduction of Public Funding – a near essential by Mr. Atik Munshi and then IPO presentation by Mr. Narasimha Das which was then followed by Sukuk Presentation by Mr. Abdel Hak and a question and answer session to clear all the problems or questions arising.
Mr Narasimha Das explained that IPO referred to as Initial Public Offering or stock market launch is a type of public offering where shares of stock in a business are sold to the general public, on a securities exchange, for the first time. An IPO (Initial Public Offering) can be used by either small or large companies to raise growth capital and become publicly traded venture. This helps in generating more capital for the company.
Then Mr Abdel Hak explained what were Sukuks, which many of us weren’t aware of. Sukuk is an Arabic name for Financial certificates but commonly referred as Islamic version of bonds. The idea behind Sukuk is simple. The prohibition of interest virtually closes the door for a pure debt security, but an obligation that is linked to the performance of a real asset is acceptable. In order words, the Shariah accepts the validity of a financial asset that derives its return from the performance of an underlying real asset. He further explained the different types of sukuks, Sukuk constitute partial ownership in a debt (Sukuk Murabaha), asset (Sukuk Al Ijara), project (Sukuk Al Istisna), business (Sukuk Al Musharaka), or investment (Sukuk Al Istithmar).
Both the forms of investments are popularly increasing worldwide and not just limited to the Middle East and Crowe Harwath did an amazing job by spreading the awareness of the two forms of investments.