The Deputy Commissioner of the Financial Services Authority in Indonesia (OJK) has detailed a strategy of seven action points in order to develop Shariah-compliant fintech and Shariah-compliant finance in the country.  Why it Matters?  The Deputy Commissioner explained these points at a webinar on the 27th of May 2021; they are aimed at creating more Islamic banking opportunities and unique Shariah-compliant business products, thereby optimising the Shariah ecosystem in Indonesia. He added that the Government of Indonesia must have a comprehensive ac...

At the third edition of the Islamic Finance News Nigeria roadshow, organised by the Nigerian Exchange (NGX), stakeholders in the Islamic finance industry highlighted the importance of ethical investments in the path to economic recovery and development.  Why it Matters?  Chief Executive Officer of NGX, Temi Popoola, said that the Islamic finance market in Nigeria was seeing continual growth on the back of heightened interest from market participants and a rising number of players, including two Islamic banks. He elaborated that consequent to the severe effects...

Bank Syariah Indonesia’s (BSI) Chief Economist Banjaran Surya Indrastomo has highlighted his optimism that the Indonesian Islamic banking sector will perform better than conventional banking in 2021. Speaking at a virtual media discussion on the 27th of May 2021, Indrastomo also stated that BSI is looking towards bridging infrastructure financing through selling Indonesian Sukuk in the Middle East.  Why it Matters?  Islamic banking is slated to perform better than conventional banking as it is relatively more resistant to shocks in society, such as...

Malaysian Rating Corp (MARC) has downgraded its ratings on Alpha Circle’s outstanding MYR 140 million Senior Sukuk Musharakah to BBBIS from AIS and MYR 55 million Junior Sukuk Musharakah to BBIS from BBBIS. Ratings Rationale  These downgrades reflect heightened concerns surrounding Alpha Circle’s capacity to meet its remaining Sukuk repayments, as its cash flow has been significantly adversely impacted by operational disruption in foreign worker permit issuances and renewals since 1Q 2020 amidst&nbs...

To support Rasmala Long Income Fund (Rasmala)’s acquisition of a supermarket investment in Greater Manchester in the United Kingdom, Abu Dhabi Islamic Bank (ADIB), in the United Arab Emirates, has provided structured Islamic financing.  Why it Matters? The property has been leased to Tesco Stores, the UK’s largest supermarket chain, subject to five-yearly index-linked upwards-only rent reviews. The UK grocery market has shown strong resilience during COVID-19, providing an investment alternative for those looking for long-term income...

The recent auditing standard set by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), pertaining to the external auditing of Shariah-compliance, will aid in the strengthening of governance and growth of Islamic finance, according to S&P Global Ratings (S&P).  Why it Matters?  Global Head of Islamic Finance at S&P, Dr Mohamed Damak, noted that whilst there are no unified Shariah rules that Islamic financial institutions have to follow, this new standard by AAOIFI addressed this gap by...

Speaking at the third Islamic Finance News Nigeria Road Show held on the 26th of May 2021, Director-General at the Debt Management Office (DMO), Mrs Patience Oniha, stated that Nigeria plans to scale up its Sukuk issuances to include projects other than road development, in the future.  Why it Matters?  The Sukuk issuances initiated by the DMO is to raise local borrowing to fund domestic projects. Whilst this has proven successful since the first issuance in 2017, Sukuk raised need...

The Government of Indonesia is encouraging the development of the Halal industry.  As a part of these efforts, the Government is focusing on setting up eight Halal Industrial Zones by 2024. This includes the three zones that are currently available.  Why it Matters? According to Indonesian Vice President, Ma’ruf Amin, the establishment of eight Halal Industrial Zones is a step towards ensuring that Indonesia remains amongst the big players in the world's Halal sector. Develop...

Determinants of Bank Performance: Empirical Study on Sharia Bank in IndonesiaIslam, Islamic banking, Credit Risk

Fitch Ratings (Fitch) has downgraded Emirates REIT’s Long-Term Issuer Default Rating (IDR) to ‘C’ from ‘B+’ and its senior unsecured Sukuk issued through Emirates REIT Sukuk Limited to 'C'/RR4/35% from 'BB-'/RR3/57%. Ratings Rationale The ratings downgrade follows Emirates REIT’s announced proposal to exchange the current USD 400 million unsecured Sukuk that matures in December 2022 for secured notes maturing in December 2024. The existing 5.125% rate of the Sukuk will be maintained, but first-year distributio...