Gulf News reported the listing on 1 October: “The UAE Gov Retail T-Sukuk 5.06% 30Sep2031 was admitted to trading at 10am Dubai time, under the symbol UAESUKUK0931.” Units are Dh1,000 each, the issue was Dh50 million, and distributions land on 30 March and 30 September. The Ministry of Finance said, in a release carried by Zawya, that orders reached Dh285 million, “approximately 5.7 times the target issuance size”, and that applications of Dh10,000 or less made up 75% of all applications.
That last number says most applicants were people with a spare few thousand, not institutions. So the useful question is the one a salaried person asks. What does this pay, and what happens if I need the money back before 2031?
What the 5.06% retail sukuk actually pays on Dh1,000
The coupon is fixed, so this part is plain arithmetic. 5.06% a year on Dh1,000 is Dh50.60, paid in two halves of Dh25.30. Ten distributions over five years make Dh253, which matches the figure Gulf News printed. On Dh10,000 that is Dh253 every six months.
For context, the Central Bank raised its base rate to 3.9% on 17 September. The sukuk pays 1.16 points above that overnight rate, locked for five years. The first retail sukuk, according to Gulf News, paid 4.30% over two years. The new one pays more and runs longer, and those two facts are connected, as the next section shows.
One more number from the subscription. Orders were 5.7 times the issue, so across all applicants only Dh50 million of Dh285 million could be filled, about 17.5 cents of every dirham sent. The announcements I read do not publish the allocation rule, and with three quarters of applications at Dh10,000 or less, the split was probably not uniform. But in aggregate, most of the money that left people’s accounts in late September came back as a refund, due by 30 September.
What happens if you sell the UAE retail sukuk before 2031
Gulf News put the trade-off in one line: the sukuk “is not a deposit product and returns are not guaranteed against market movements if sold early.” This is the part worth slowing down for.
The sukuk will always pay Dh25.30 every six months and Dh1,000 at the end. Those cash flows never change. What changes is how much a buyer will pay for them. If new government paper of similar length pays more than 5.06%, nobody pays full price for one that pays 5.06%. The price drops until the remaining payments earn the buyer the going rate.
Here is a worked example. Say I bought one unit and sell it in October 2027, just after the second distribution, with four years and eight payments left. I have already received Dh50.60.
| Market rate for 4-year paper, Oct 2027 | Sale price per Dh1,000 | Net result after one year |
|---|---|---|
| 4.06% (down 1 point) | Dh1,036.58 | +Dh87.18 |
| 5.06% (unchanged) | Dh1,000.00 | +Dh50.60 |
| 6.06% (up 1 point) | Dh964.95 | +Dh15.55 |
| 7.06% (up 2 points) | Dh931.35 | −Dh18.05 |
These are my own calculations: the eight remaining payments discounted at each rate, compounded every six months. The market rates are illustrative, not forecasts, and real trades add a broker’s fee and a bid that may sit below the theoretical price.
A fixed coupon is a promise about payments, not about price.
That is also why the first issue at 4.30% over two years and this one at 5.06% over five are different products, not just different rates. A one-point move on paper with a year or two left shifts the price far less than the same move with four years left. Part of the extra 0.76 points is payment for carrying that longer exposure.
The fees on a small ticket
The Ministry of Finance page says fees on the listed retail sukuk are “subject to brokers/custodian terms”. For the fractionalised version sold through banks, it lists “Buy fee: 0.25%; Sell fee: 0.25%; No redemption fee at maturity.” On a Dh4,000 holding that is Dh10 in and Dh10 out, against a six-month distribution of Dh101.20. Small, but a sale in the first year gives up about a fifth of a distribution in fees alone, before any price movement.
At the trading company where I work, a supplier who agrees a fixed price for five years is making a bet on where the market goes. When the market moves against them, the contract does not change; the value of the contract does. A fixed-coupon sukuk puts the holder in exactly that supplier’s seat.
How I would record it
In my own books the Dh1,000 is not an expense. It is a transfer from a bank account to an asset, the same treatment as a fixed deposit. Each Dh25.30 is income on the day it lands. A subscription refund is neither income nor a cost, just money returning to the account it left. If the unit is sold, the difference between Dh1,000 and the sale price is the gain or loss, recorded once, on the sale date. Until then the honest value to carry is Dh1,000, because the only way to realise a different number is to sell.
None of this says whether to buy it. The arithmetic only shows which question decides the outcome: will this money stay put until 30 September 2031? If yes, the market price in between is noise and the return is the printed 5.06%. If not, the return is whatever rates do between now and the day it is needed. Run that table with your own date and your own rate before deciding anything.