UAE retail sukuk enters Nasdaq Dubai secondary trading

The UAE Ministry of Finance has listed its second five-year Sovereign Retail T-Sukuk on Nasdaq Dubai, opening the government-backed Islamic instrument to secondary-market trading after subscription, allocation and settlement were completed.

The offering drew subscription orders of AED285 million, about 5.7 times its AED50 million target, underscoring demand among individual investors for the second issuance under the sovereign retail programme.

The sukuk carries an annual profit rate of 5.06 per cent, with distributions every six months, and has a minimum investment threshold of AED1,000. The subscription window ran from September 23 to September 28, with allocation completed on September 29 and issuance and refunds scheduled for September 30.

Secondary trading allows investors to increase their holdings or sell before maturity through authorised brokers on Nasdaq Dubai. Market makers and liquidity providers are supporting order-book trading, intended to provide liquidity and price discovery.

Participation data released by the Ministry showed that applications for AED10,000 or less accounted for 75 per cent of all subscription applications. UAE nationals represented 69 per cent of overall demand, while investors across 110 nationalities participated in the offering.

Women accounted for 17 per cent of total invested capital, and the Ministry reported strong participation from investors aged under 25. Nearly half of unique subscribers had also invested in the inaugural retail sukuk tranche, indicating repeat participation in the programme.

Mohamed bin Hadi Al Hussaini, Minister of State for Financial Affairs, said the start of trading marked a step in developing the UAE’s domestic dirham-denominated capital markets and broadening access to government debt instruments.

“Continued strong demand from individual investors reflects deep confidence in our national financial infrastructure and highlights our ongoing efforts to expand public participation in sovereign initiatives,” Al Hussaini said.

He said secondary-market trading gave investors liquidity and flexibility while supporting the government’s objectives of widening financial inclusion and encouraging a sustainable culture of saving among families and communities.

Hamed Ali, chief executive of Nasdaq Dubai and Dubai Financial Market, said the second tranche’s listing and trading launch reflected growing appetite for Sharia-compliant instruments among individual investors. He said market infrastructure and dedicated market-making arrangements would allow investors either to acquire additional sukuk or sell holdings as their financial requirements changed.

The second issuance has a longer maturity than the first retail T-Sukuk launched earlier this year. The inaugural tranche had a two-year tenor and a 4.30 per cent annual profit rate, with payments every six months.

That first offering attracted AED445 million of subscription requests against an initial AED50 million target. The Ministry subsequently doubled the issuance size to AED100 million. It was listed on Nasdaq Dubai in July, creating the trading framework now being used for the second tranche.

The retail programme was introduced to give UAE nationals and residents access to newly issued sovereign sukuk through digital subscription channels. The instruments are Sharia-compliant and backed by the UAE Government, with the AED1,000 entry threshold designed to make sovereign fixed-income investment accessible to a wider pool of individual investors.

The second issuance was arranged in collaboration with the Central Bank of the UAE, Nasdaq Dubai, Dubai Financial Market and participating banks. Emirates NBD served as lead receiving bank, while Emirates Islamic, Abu Dhabi Islamic Bank, Ajman Bank, Mashreq, Abu Dhabi Commercial Bank and First Abu Dhabi Bank were named as participating receiving banks.

Nasdaq Dubai acts as the central securities depository, settlement venue and listing platform for the programme. The exchange provides the secondary market through which holders can trade their sukuk after issuance, rather than retaining the securities until maturity.

The Ministry launched the Sovereign Retail T-Sukuk Programme in June as part of its effort to expand individual participation in government investment instruments and develop the domestic dirham debt market. Its structure provides a primary-market subscription at par value before the securities move to exchange trading after allocation and settlement.