The restructuring of BIMB Holdings (BIMB) may enable a proper re-rating of Bank Islam Malaysia (Bank Islam), in addition to boosting the financial position of the bank, according to a recent research note by Maybank Investment Bank Research (Maybank IB Research).  Why it Matters? The main positive of the ongoing BIMB restructuring exercise is that it would allow for a proper re-rating of Bank Islam, which Maybank IB Research maintains is currently undervalued. Upon completion of the restructuring, Bank Islam will assume the listing status of BIMB. According to analysts,...

COVID-19 has triggered a change in investor risk appetite, with an increasing number of investors shifting money from fixed income investments into equities, subsequent to a rally in healthcare stocks in 2020. In an interview with the Malaysian Reserve, Chief Executive Officer of fund manager Principal Islamic Asset Management (Principal Islamic), Datuk Syed Mashafuddin Syed Badarudin, also highlighted opportunities in the Islamic investment space. Why it Matters?  Principal Islamic has seen a substantial number of investments being made in the equit...

The Bangko Sentral ng Pilipinas (BSP) has approved a liquidity risk management framework for Islamic Banks and Islamic Banking Units in the Philippines. The Monetary Board approved Circular No. 1116 (the Circular) on the 25th of May 2021, which is based on the existing liquidity risk management framework for conventional banks, with additional provisions to cover Islamic banking. Why it Matters?  The guidelines emphasise Shariah compliance in liquidity risk management and the choice of instruments/tools to mitigate liquidity risk, and provide gu...

Adding to its efforts to enhance the presence of Islamic financial technology (fintech) in Malaysia, the Securities Commission Malaysia (SC) has collaborated with the United Nations Capital Development Fund (UNCDF) and unveiled its FIKRA Islamic Fintech Accelerator Programme (FIKRA).  Why it Matters?  The objective of FIKRA is to identify and scale innovative Islamic fintech solutions that would address three main challenges, namely, new Islamic capital market offerings, accessibility and social finance integration. Speaking at the launch, Chair...

The focus on climate remains, but Covid has balanced environmental issues somewhat more with social issues than in the pastThe movement towards greater availability of data and integration by financial sector institutions is gaining greater visibility on regulatory radarsPressure to move towards standardization and higher standards with a global approach has heated up, even though it may not produce the best outcomes Development in responsible finance has been accelerating for the past few years. With the Covid-19 pandemic sweeping around the world in 2020, acknowledgement of ES...

CDP analysis finds that financial institutions' financed emissions, which most don’t report, are 700 times larger than their operational emissionsCDP highlights the importance of financed emissions as a source of risk that isn’t adequately measured or managed RFI Foundation has an ongoing series of reports focused on Islamic markets looking at where the financial sector’s emissions are concentrated A new analysis from CDP has found that many financial institutions – banks, insurers, asset managers and asset owners – are failing to...

Fitch Ratings (Fitch) has affirmed Ajman Bank’s (AJB) Long-Term Issuer Default Rating (IDR) at BBB+ with a Stable Outlook. In addition, AJB’s viability rating (VR) has been affirmed at b+. AJB is a United Arab Emirates- (UAE) based Islamic bank that commenced operations in 2009, with the Government of Ajman and the ruling family collectively owning 36.7% of bank shares.  Ratings Rationale AJB’s IDR reflects a high chance of support available from UAE authorities if required. Sovereign wealth funds and ongoing revenue from hydrocarbon production is...

Malaysian Rating Corporation (MARC) has affirmed its ratings on Ranhill Powertron II’s (RPII) MYR 90 million outstanding non-guaranteed Islamic Medium-Term Notes (IMTN) at AAIS and MYR 350 million outstanding guaranteed IMTN at AAAIS(fg), with a Stable Outlook. RPII owns and operates a 190 MW combined-cycle gas turbine Rugading Power Station in Sabah, Malaysia under a 21-year Power Purchase Agreement (PPA) with Sabah Electricity Sdn Bhd (SESB). Ratings Rationale  The AAIS rating on the MYR...

Indonesian manufacturer Oki Pulp & Paper Mills, which is part of Asia Pulp & Paper, Sinarmas Group, has announced plans to issue IDR 4 trillion worth of debt securities, comprising IDR 3 trillion in Phase I bonds and IDR 1 trillion in Sukuk Mudharabah Phase 1 (Sukuk) in 2021 to refinance debt payment and business development purposes. Pemeringkat Efek Indonesia (Pefindo) has assigned a national rating for PT Oki Pulp & Paper Mills' long-term debt securities at idA+ and idA+(sy). Why it Matters?  Around 40% of the funds raised from the Sukuk and bonds issuance wil...

The economic situation of Malaysia is expected to improve in 2021, in alignment with the Government of Malaysia’s efforts towards the recovery of economic activity and global trade, despite COVID-19, said Prime Minister Tan Sri Muhyiddin Yassin at a recent television interview.  Why it Matters?  As a result of the Government’s plans, improvement has already been recorded, with exports and imports on the rise. Further, the number of workers employed reached 150,000, which is far higher than the estim...