TBY talks to Abdul Samad Mohd. Al Maskari, CEO of Al-Madina Investment, on the performance of the local equity markets, and the potential for locally listed sukuks.

Abdul Samad Mohd. Al Maskari
Abdul Samad Mohd. Al Maskari obtained a BSc from Ain Shams University in Egypt and a CIFP from Malaysia, which is the equivalent of a Master’s degree in Islamic banking. He joined the company in 1999 as a Financial Controller, and became the CEO in 2008. He has played an important role for Al Madina in becoming one of the leading companies in the Sultanate. His leadership of the company has been reflected in the diversification of its investment portfolio, comprised of real estate, logistics, educational, and healthcare services. He worked earlier for four years as an expert with Ernst & Young Oman.

How would you assess the performance of the Muscat Securities Market (MSM) over the last year?

The MSM's issue has always been liquidity. Since 2013, the MSM was a bit slow compared to the other markets in the Gulf; however, we have recently seen a big improvement. Two IPOs were announced in May 2014, and it has boosted the MSM as it has witnessed a huge oversubscription for such IPOs. In Oman, more companies need to be traded on the MSM. More IPOs will generate a vibrant exchange, which benefits the market locally. On a different note, the MSM also requires a lot of innovative products to be launched. The market needs depth, which can be achieved by introduction of structured products, bonds, sukuks, and other different kinds of investment instruments.

What kind of services does Al Madina Investment (AMI) provide?

AMI started its journey back in 1998. As of today, the firm has been known to the Omani and GCC market as a firm that provides investment-banking services. Throughout, we have delivered to the market many private equity transactions, which led to the birth of Al Madina Real Estate, Al Madina Logistics, Al Madina Takaful, the Tilal Fund (the first and only real estate fund), and the Tilal Sukuk (the first sukuk in Oman), to name a few. We are proud to mention that to date we have raised around $500 million. This is an excellent achievement taking into consideration our humble set up.

With the issuance of the first sukuk in Oman you have played a historic part in the Islamic finance sector in the Sultanate. How are Islamic products shaping the capital markets?

Islamic products are being proven day-by-day to be some of the best products out there because they are based on real assets. All the Islamic banks continued growing throughout the crisis of 2008. And of course, this was based on real assets and not artificial transaction. Worldwide, there is a huge shortage of Islamic finance products. Every year, Islamic asset management, sharia-compliant banking, and takaful companies are growing, but they need assets and products to invest in. It is then up to the investment companies to come up with new structured products and projects for them. Most of the sukuks that have been launched in the international market have been oversubscribed, and that is because there is a lot of cash in the system. The Oman government has announced that, in the budget of 2014, it will consider structuring the first government sukuk in Oman, worth over OMR200 million. In 2013, we arranged the first sharia-complaint sukuk in the country for Tilal Development Company SAOC, which saw great demand from the market, both local and regional. It was also a rated paper.

Are partnerships an important part of your business model?

Partnership has been something that we have been leveraging on. When we think of how we can add value, instead of just starting from zero, we look for partners that are in that line of business. Then, we bring them in in two ways; as management in the project and as partners in equity—they add value because it is their concern to grow. It is a recipe for success. It is also very important to know how to grow. I think we offer a great deal of value-added because our main concern is to get Omanis involved. We train a lot of Omanis. We train them to grow and to start their own businesses. Out of 26 employees, 22 are Omanis. In all of our companies, we have a high level of Omanization, although some technical aspects like Islamic sukuks need to have expatriates working on them.