As global issuers look to fund significant budget requirements and refinance maturing debt, Fitch Ratings (Fitch) expects global Sukuk supply to accelerate in 2021. This follows a resilient 2020, which saw Sukuk volumes similar to 2019 levels, despite the impacts of COVID-19. According to Fitch, diverse and innovative sustainable, green, transition and hybrid Sukuk are anticipated to continue attracting demand across a wide investor base.  Furthermore, Fitch notes that the resumption of diplomatic ties resulting in the easing of investment restrictions across th...

A low interest-rate environment and abundant liquidity are anticipated to support the global Sukuk market in 2021, with conditions expected to remain buoyant throughout the year. S&P Global Ratings (S&P Global) forecasts total Sukuk issuances across the globe to range between USD 140-155 billion in 2021. Global Sukuk issuances in 2020 were recorded at USD 139.8 billion, down from USD 167.3 billion in 2019.  S&P Global anticipates core Islamic finance countries, such as Malaysia, Indonesia and the Gulf Cooperation Council (GGG) to witness positive economic growth in 2021,...

Responsible finance was gaining traction before Covid in Islamic markets; it went mainstream in 2020Uncertainty about what the 'new normal' will look like brings economic planning horizons in line with those needed to address major social and environmental issuesPrioritising short-term profits at the expense of social and environmental impact is becoming economically unsustainableThe best approach for financial institutions to manage that uncertainty is to seek out a sustainable balance between economic, social & environmental impacts Despite or perhaps because of...

RAM Rating Services (RAM) has reaffirmed the AAA/Stable rating of Suria KLCC’s MYR 600 million Islamic Medium-term Notes Programme (2014/2044). Suria KLCC owns the Suria KLCC Mall located within the Kuala Lumpur City Centre (KLCC) development.  According to RAM, the reaffirmation of the rating is based on Suria KLCC’s modest financial profile, which provides headroom for a decrease in earnings resulting from the COVID-19 pandemic. This is premised by the company’s low leveraged balance sheet, strong debt protection metrics, as well as the...

Saudi Automotive Services Company (SASCO) has announced the signing of Shariah-compliant bank facilities amounting to SAR 630 million with Al-Rajhi Bank on the 7th of January 2021, according to a Saudi Stock Exchange (Tadawul) disclosure.  The facilities comprise of two long-term financing loans worth SAR 200 million and SAR 250 million, a SAR 100 million short-term financing loan, SAR 50 million bank guarantees, as well as a SAR 30 million hedging limit.  According to the Tadawul disclosure, the SAR 200 million long-term financing will be paid...

First Abu Dhabi Bank’s (FAB)’s inaugural USD benchmark offering of USD 500 million Sukuk, which was sold on the 7th of January 2021, has attracted a total orderbook of around USD 1.5 billion, representing a 3x over-subscription rate, according to media reports  The Sukuk, which has the lowest-ever yield on any five-year USD issuance from the Middle East and North Africa region, was issued at 90 basis points over mid-swaps, with an all-in yield of 1.411% through FAB Sukuk Company Limited.  Reported to be the first global Sukuk issuance in...

The plight of flood victims in several states in Malaysia including Pahang, Johor, Kelantan, Terengganu, and Perak, is receiving attention from various banking institutions in the country who are offering loans, financial aid and moratoriums to eligible customers affected by the recent floods in order to ease the additional financial burden and subsequently help affected communities rebuild their livelihoods.  According to local media reports, Bank Islam Malaysia will channel MYR 400,000 from its Islamic crowdfunding platform Sadaqa House to...

The World Bank’s Global Economic Prospects report released in early January 2021 forecasts Turkey’s gross domestic product (GDP) to increase by 4.5% year-on-year (YoY) in 2021, down from the previous estimate of 5.0%.  The forecast was downgraded due to the spike in COVID-19 cases, a tight monetary policy (increase in interest rates), as well as the likelihood of lower tourism revenues. Coming out of an anticipated 0.5% YoY economic growth in 2020, the World Bank states that tourism-dependent nations are likely to experience weaker-than-anticipated economic...

The Indonesian Waqf Board (BWI) has developed two programmes to assist Muslims as well as the general public in the country. These programmes, which were initiated during the pandemic include the cash waqf (KALISA) and Cash Waqf Linked Sukuk. Under the KALISA programme, the largest proportion of funds was allocated towards the preparation of personal protective equipment (PPE), as well as assistance offered to indivuiduals affected by COVID-19. Head of BWI's Public Relations, Socialisation and Literacy Divis...

In its Middle East and North Africa (MENA) macroeconomic update released on the 11th of January 2021, Fitch Solutions’ downgraded Egypt’s real gross domestic product (GDP) growth estimate for the third time in three months, to 3.0% for 2021, down from 3.2% projected in December 2020. This followed a 3.3% real GDP estimate for 2021 made in November 2020. Fitch Solutions’ also expects Egypt to achieve GDP growth of 4.0% over the next four years. Fitch Solutions’, anticipates Egypt to show stronger growth compared to the MENA region, given that it benefits...