The Nairobi Securities Exchange PLC (NSE) has granted approval for the listing of Linzi Sukuk on its Unquoted Securities Platform (USP). This marks the first Shari’ah-compliant product to be admitted to the platform, expanding the offerings on the USP.
The Linzi Sukuk, issued by Linzi FinCo Trust, a common law unincorporated trust, amounts to KShs 3.0 billion and represents an Islamic secured residential-based security with a 15-year maturity period. Offering an attractive internal rate of return at 11.13%, Sukuk, commonly known as Islamic bonds, adhere to Shari’ah principles, specifically the prohibition of interest payments.
The approval of Linzi Sukuk underscores the growing recognition and acceptance of Shari’ah-compliant financial instruments in Kenya’s capital market. The funds raised through the Sukuk issuance, approved by the Capital Markets Authority in September, will be allocated to financing the design, construction, and commissioning of 3,069 institutional houses, aligning with broader efforts to address housing needs and boost infrastructure development.
Geoffrey Odundo, Chief Executive of NSE, expressed optimism about the potential of Shari’ah-compliant instruments in Kenya, emphasizing their pivotal role in meeting diverse financing needs across priority sectors such as infrastructure and housing.
The Unquoted Securities Platform (USP), an automated solution for the issuance and trading of securities of unquoted companies, now includes Linzi Sukuk among its offerings, alongside the Acorn Student Accommodation Development Real Estate Investment Trust (D-REIT) and the Income Real Estate Investment Trust (I-REIT).
The USP plays a crucial role in facilitating value discovery, capital raising, and providing a trading experience for small and medium enterprises, serving as a stepping stone before enterprises transition to the listing segments offered by the NSE. The inclusion of Linzi Sukuk further diversifies the platform’s offerings, enhancing its attractiveness as a vibrant hub for innovative and Shari’ah-compliant financial instruments.
As Kenya embraces financial instruments rooted in ethical and inclusive principles, the listing of Linzi Sukuk sets a precedent for future Shari’ah-compliant products on the NSE, contributing to the broader development and sophistication of the country’s capital markets.
