In a statement released on August 23, 2023, the Ministry of Finance (MoF) of the UAE, in collaboration with the Central Bank of the UAE (CBUAE), has announced the results of the third dirham-denominated Islamic Treasury Sukuk auction, known as T-sukuks, as part of the 2023 T-sukuks issuance program.

The recent auction captured significant attention from eight primary dealers, generating bids totaling AED 6 billion, which exceeded the initial offering by a substantial 5.5 times.

Both the two- and five-year tranches experienced robust demand, resulting in market-driven prices that were successfully achieved, with a spread of zero to two basis points over comparable US Treasuries.

A notable highlight of the third auction was the introduction of the first dirham-denominated Islamic Treasury Sukuks with a five-year maturity. This addition showcased impressive results, boasting an oversubscription of 6.6 times. The auction also continued the strategy of reopening two-year T-sukuks, a step towards enhancing liquidity in the secondary market and gradually expanding the size of individual sukuk issues over time.

According to the statement, the T-sukuks program is anticipated to play a crucial role in constructing the UAE's dirham-denominated yield curve. This strategic initiative offers secure investment opportunities for investors, enriches the local debt capital market, fosters an attractive investment environment, and propels sustainable economic growth.

We would recall that in May, the authorities disclosed that the first offering of the UAE's dirham-denominated treasury sukuk for the year witnessed a remarkable oversubscription of 7.6 times, attracting bids amounting to Dh8.3 billion.

At this juncture, it is worthy to note that the global potential of sukuk is being strategically harnessed as a potent financial tool to invigorate economic advancement. As nations seek innovative methods to fund vital infrastructure projects and stimulate economic progress, the issuance of sukuk presents an inclusive and ethically sound investment avenue that transcends geographical boundaries, ultimately contributing to the prosperity of diverse economies.

 If News