The United Arab Emirates has received an AA rating (Stable Outlook), assigned by Fitch Ratings (Fitch), in a move reflecting creditworthiness of federal government entities, as well as their keen resilience to draw up plans required to ensure sustainable growth. Fitch notes that this is all done whilst maintaining the highest performance standards with regards to credit control, supported by a range of strengths.  Commenting on these ratings, His Highness Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance, ...

Standard and Poor’s Global (S&P Global) expects the global Islamic finance industry to record a mild recovery in the short-term, following 11.4% year-on-year growth witnessed in 2019. The modest forecasts come on the back of a significant slow-down in core Islamic finance economies in 2020 as governments of various countries implemented measures to contain the effects of COVID-19. Having forecast low-to-mid-single-digit growth for the global Islamic finance sector for 2020/2021, S&P Global has identified some opportunities for...

The International Islamic Liquidity Management Corporation (IILM) has announced the successful completion of an auction for the reissuance of A1-rated short-term Sukuk worth USD 1.070 billion. According to a statement issued by the IILM on the 10th of November 2020, the Sukuk had an average oversubscription ratio of 145%, with a combined order book in excess of USD 1.56 billion. The Sukuk was issued in three series with different tenures: a USD 400 million issuance with a one-month tenure and a profit rate of 0.35%, a USD 460 million issuance with a three-month...

An Islamic supply chain finance platform, TFX Islamic, launched on the 10th of November 2020, targeting small and medium enterprises (SMEs) in the country, aims to enable high-potential SMEs scale up their businesses. The platform, launched by TFX Islamic Sdn Bhd (TFX), recognises that evolution in supply chain trade financing has led to businesses seeking different ways to improve their supply chains significantly.  TFX stated that supply chain financing leverages on financing cost arbitrages between buyers and sellers, allowing bu...

Data from Saudi Arabia’s General Authority for Statistics indicated that the country’s gross domestic product (GDP) for the third quarter of 2020 (3Q 2020) decreased 4.2% year-on-year, reflecting an improvement over the 7.0% YoY contraction recorded in the second quarter of 2020 (2Q 2020).  On a seasonally-adjusted basis, the GDP grew 1.2% quarter-on-quarter (QoQ) in 3Q 2020, compared to a 4.9% QoQ contraction seen in 2Q 2020.  Authorities in Saudi Arabia noted that the flash estimates for 3Q 2020 were partial, subject to strong degree of appr...

The Malaysian Budget 2021 has included some initiatives to encourage an increased uptake of both Takaful and insurance in the country, as a means to facilitate more Malaysians to seek risk protection. Muhammad Fikri Mohamad Rawi, Chairman of the Malaysia Takaful Association, stated that the financial assistance provided to the B-40 group to purchase Perlidungan Tenang products, with stamp duty exemption applicable until 2025, would support the low-income groups to get insurance and Takaful coverage.  Added to this, the proposed withdrawal f...

Islamic mutual funds and other Shariah-compliant investors are restricted to investing only in Shariah-compliant instruments. Thus, while the conventional fund manager allocates between stocks, bonds and cash or money market instruments, the Islamic mutual fund would be restricted to Shariah-compliant equities, Sukuk and Islamic interbank money market (IIMM) instruments. Where Islamic money market instruments are unavailable, Islamic bank deposits would hold the cash. Of interest to all investors and fund managers, in particular, is the question of...

S&P Global Ratings (S&P) has affirmed Qatar’s sovereign credit rating at AA-/Stable/A-1+, according to media sources. The Stable Outlook reflects S&P’s view that Qatar’s credit profile will remain resilient as it is supported by the wealthy economy and strong Government and external net assets. In addition, S&P expects that the Government of Qatar will provide liquid support to the banking industry, in the unlikely event of sudden reversals in foreign capital flows. Despite the sharp decline in the economy as a result of COVID-19 and low hydrocarbo...

Moody’s Investor Service (Moody’s) has estimated global Sukuk issuances for 2020 at USD 170 billion, down from its previous estimate of USD 180 billion made in March 2020. The revised estimate is attributed to lower than anticipated corporate or private Sukuk issuances in 2020, driven by the COVID-19 pandemic, according to Moody’s Senior Vice President, Nitish Bhojnagarwala. Senior Vice President at Moody’s Soverreign Risk Group, Christian de Guzman, noted that global Sukuk issuances were going to be pulled down by the Malaysian corporate sector. As pri...

RAM Ratings (RAM) has assigned preliminary AAA/Stable long-term ratings and P1 short-term ratings to Pengurusan Air Selangor’s (Air Selangor) proposed Islamic Medium-Term Notes Programme of up to MYR 10 billion and Islamic Commercial Papers Programme of up to MYR 10 billion. Both facilities have a combined limit of MYR 10 billion in nominal value in the Sukuk Murabahah Programme (Sukuk).  Classified as a dependent entity under RAM’s methodology for government-linked entities, Air Selangor has been the sole licensee for water treatment and distribution in...