Post by : Badri Ariffin

The April auction for UAE dirham-denominated Islamic Treasury Sukuk (T-Sukuk) has been successfully conducted by the Ministry of Finance (MoF) in partnership with the Central Bank of the UAE, raising AED1.1 billion.

This issuance forms part of the government’s 2026 T-Sukuk program, designed to bolster the financial market and provide secure investment alternatives.

Eight primary dealers participated actively in the auction across two tranches. One tranche matures in October 2027, while the other is a 7-year Sukuk set to mature in February 2033.

The total bids reached AED5.20 billion, resulting in a 4.7 times oversubscription. This significant demand underscores the robust confidence among investors in the UAE’s financial stability.

The 7-year Sukuk tranche captured attention with a coverage ratio of 5 times, priced only 10 basis points over US Treasury yields, reflecting competitive pricing. This comes after the earlier issuance in February 2026, which was 6 times oversubscribed and priced favourably compared to US Treasury benchmarks.

These results illustrate the government’s commitment to establishing a reliable dirham-denominated yield curve. The Yield to Maturity (YTM) for the October 2027 tranche was noted at 3.92%, while the February 2033 tranche stood at 4.13%. The spreads over US Treasuries were 23 basis points and 10 basis points respectively.

For investor accessibility, these Sukuk are listed on Nasdaq Dubai, enhancing investment opportunities in the secondary market.

Overall, the Islamic T-Sukuk initiative continues to bolster local debt markets by providing secure investment solutions, aligning with the UAE’s long-term economic growth strategies.

#world news #Global News #Dubai News #UAE News