Ankara and Doha need to consider joint issuance of sukuks and their cross-listing on Borsa Istanbul and the Qatar Stock Exchange (QSE) to attract a broader investor base, according to a top official of Participation Banks Association of Turkiye (TKBB), a public entity with a mandate to represent the participation banking sector both nationally and internationally.

Both Turkiye and Qatar should also prioritise Shariah-compliant debt market development, fintech, digital driven innovations, and sustainable Islamic finance; Ismail Vural, secretary-general, TKBB, said in a report of the Qatar Financial Centre (QFC).

Turkiye has a well-established sukuk market, ranking fifth globally in sukuk issuance over the past five years, he said, quoting data from London Stock Exchange Group (LSEG).

Enhancing co-operation in this area, he said, can create new opportunities for financing large-scale infrastructure, energy, and trade projects.

"Joint sukuk issuances can provide a powerful financing tool, while cross-listing sukuk on both Borsa Istanbul and the QSE can attract a broader investor base," Vural said.

Additionally, he said, regulatory harmonisation between the two countries would facilitate seamless cross-border sukuk deals, further strengthening the market.

"To strengthen collaboration in Islamic finance over the next five years, Turkiye and Qatar may prioritise sukuk market development, fintech- digital driven innovations, and sustainable Islamic finance," according to him.

Finding that fintech and digital Islamic banking are also set to play a crucial role in shaping the future of financial collaboration; he said blockchain-based Islamic finance solutions, such as smart contracts, can improve the efficiency and security of Shariah-compliant transactions.

With two digital participation banks already operating in Turkiye, supporting digital-only Islamic banks and fintech startups will enhance access to mobile-based participation banking services and promote greater financial inclusion, he said.

"Additionally, the development of seamless, Shariah-compliant cross-border digital payment systems will further deepen financial ties between Turkiye and Qatar," he added.

Sustainable Islamic finance is emerging as a key priority, and stronger collaboration between Turkiye and Qatar can accelerate progress in this field, Vural said.

Developing innovative Islamic banking products that integrate both Shariah principles and ESG (environment, social and governance) considerations will be vital for the future of the sector, according to him.

Turkiye’s participation banking sector, led by TKBB, has already placed sustainability at the centre of its strategy, taking significant steps to promote ESG-aligned financial practices.

"Strengthening collaboration between Turkiye and Qatar in this area will further leverage Islamic finance for the achievement of SDGs (sustainable development goals) and drive meaningful progress in sustainable finance," he said.

"By focusing on these strategic areas, Turkiye and Qatar can reinforce their leadership in Islamic finance, foster deeper economic co-operation, and promote sustainable growth within the sector," he added.

The growing collaboration between the Islamic finance of Turkiye and Qatar has "significantly" strengthened sectoral ties and "is fostering financial integration and expanding opportunities for both economies", according to him. In this regard, he cited the signing of a MoU between TKBB and QFC in 2023.

Aligned with Qatar’s National Vision 2030, this cooperation presents significant opportunities. Turkiye’s participation banks, with their expertise in export financing and SME or small and medium enterprises support covering 30 industrial sectors, play a crucial role in strengthening financial ties between the two countries, he said.

Turk Eximbank, in collaboration with TKBB, has introduced a suite of participation-based financial products, including participation-based receivables insurance, sales financing with profit declaration, interest-free pre-shipment export financing, and interest-free financial leasing.

"These tailored solutions will contribute to expanding Turkiye’s foreign trade volume and enhancing the global competitiveness of Turkish exporters, including in the Qatari market," he said.

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