The Nairobi Securities Exchange (NSE) has officially launched the Linzi Sukuk bond on its unquoted securities platform. The event, held at the Exchange building, was attended by President William Ruto.
– The Linzi Sukuk bond is the first Islamic and Sharia-compliant financial asset to be listed on the NSE.
– Initially floated in May 2023, the Linzi Sukuk bond successfully raised the targeted Ksh.3 billion from Ksh.3.02 billion in bids.
– This residential-based security aims to facilitate the construction of 3,069 affordable housing units. It has a maturity period of 15 years and an internal rate of return of 11.13%.
“The listing of the first Sukuk on the NSE PLC not only highlights the growing demand for ethical and inclusive investment options but also paves the way for further expansion of Shariah-compliant products in the Kenyan market, opening avenues for more investors to participate in the growth and development of our economy,” said NSE CEO Frank Mwiti.
In September, the Capital Markets Authority (CMA) approved the issuance of the Sukuk bond by Linzi Finco Trust.
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Sukuk bonds provide alternatives to conventional debt financing and resource mobilization, supporting economic growth and prosperity. They aim to diversify investment portfolios and expand ethical financing options in the market.
The bond proceeds will finance several residential projects for the Kenya Defence Force (KDF).
“The introduction of the Linzi Sukuk into our market unlocks new avenues for investment, expands our financial toolkit, and paves the way for a more inclusive and resilient economy,” said Sheikh Ibrahim Lethome, Chairperson of the CPF Salih Advisory Council.
Sukuk bonds are financial instruments that comply with Shariah principles, providing investors with a share of the profits generated by the underlying assets.
“Our commitment extends to the privatization of government-owned enterprises as part of our broader economic liberalization policy. This will not only stimulate market activity but also support the government’s strategy to divest its stakes in key corporations, enhancing overall market dynamics,” President Ruto said.
