18/06/2012
Saudi industrial companies are now finding sources of funding through the issuance of certificates under the Islamic project finance instruments to strengthen their financial position and diversify funding sources, which will reflect positively on the Saudi Stock Exchange (tadawul).
A number of experts said that this trend launched by the Saudi Basic Industries Corporation (SABIC) as the first Saudi entity, to maximize the proportion of Islamic financing in the company. It was followed by a number of other companies, most recently some manufacturing companies which have already announced the issuance of certificates to achieve great success in Islamic financing.
Engineer Mutlaq Al Morished, Chairman of Saudi Kayan Petrochemical Co. (Kayan) said that the launch of the Islamic trading instruments in the financial market is a positive step. It is one of the important sources for funding at relatively low cost and appropriate conditions at a time when banks are more stringent and selective in their lending after the global financial crisis.
Al Morished expected that more corporate and industrial companies to go for the issuance of Islamic finance instruments that will be more flexible and positive in the financing of projects. He pointed out that the trading of these instruments is an important measure undertaken by the CMA in order to find new investment channels for individuals and corporate investors in the Kingdom.
Eng. Mubarak Al-Khafrah Chairman, National Industrialization Company in a statement issued by the company said: "We are proud of this success achieved in the Islamic financing by the company which gives us the flexibility to finance operations and future expansion, and reflects the continuing trends of successful manufacturing company.
Dr. Moayyed Al-Qurtas Vice Chairman & CEO of TASNEE said that this financing is part of the company's strategy to diversify funding sources, and extend the scope of benefits, which contribute to expanding the company in various projects and businesses. Majed bin Abdullah, a specialist of the National Industrialization Company, noted the negative aspects of the Islamic financing instruments. There is lack of awareness of this financing in the market, he said.
