New scenarios developed by the Network for Greening the Financial sector provide a common basis for understanding global climate and transition risks, including the risk they pose to Islamic marketsRegulators have made it clear they are investing in more and better data to understand climate-related financial risks, and will expect the financial institutions they supervise to become better at integrating these risksResearch from RFI Foundation among others has shown how far financial institutions still have to completely understand and integrate climate-related (physical and transition)...

Half of the global economy is moderately or highly dependent on natural capital that faces increasing degradation, and climate change alone is expected to reduce global GDP by 10% by 2050The financial impacts of natural capital loss – including from climate change – play out over a long time but the effects are not always slow to materialize, making it an immediate risk concern on environmental and social groundsInvestment in nature-based solutions to repair or avoid the natural capital degradation or mitigate current losses will triple or quadruple in coming years, and some...

The decision to place Lembaga Tabung Haji (LTH) under the regulation of Bank Negara Malaysia (BNM) as announced by Malaysia’s Ministry of Finance (MoF) on the 15th of July 2021, is a temporary measure until the findings of the Royal Commission of Inquiry (RCI) are presented to the Government of Malaysia for further steps. This was clarified by Malaysia’s MoF on the 22nd of July 2021.  Why it Matters?  The MoF stated that the move will not alter the nature of LTH's role as a management agency fo...

Bank Indonesia (BI) has decided to hold its interest rate at 3.5%, as it has been since February of 2021. The other two main policy rates in Indonesia also remain unchanged, with the deposit facility rate at 2.75%, and the lending facility rate at 4.25%, as stated by Perry Warjiyo, Governor of BI, at a virtual press conference held on the 22nd of July 2021.  Why it Matters? At present, Indonesia is tackling one of the worst COVID-19 outbreaks in the world, with 1,000 deaths reported daily. This is due to the&nb...

Singapore-based Sabana Shari'ah Compliant Industrial Real Estate Investment Trust (Sabana REIT) has announced that it is removing the requirement for its investments to be managed in compliance with Shariah principles and procedures, according to a statement issued on the 22nd of July 2021. The revision will take effect on or around the 21st of October 2021. In addition, Sabana REIT will be renamed as Sabana Industrial REIT from the effective date of change.  Why it Matters?  The revised investme...

Moody’s Investors Service (Moody’s) has affirmed the Islamic Corporation for the Insurance of Investment and Export Credit’s (ICIEC) Aa3 insurance financial strength (IFS) rating, with a Stable Outlook.   Ratings Rationale  The affirmation reflects ICIEC’s improvements in stand-alone fundamentals, particularly its credit quality, which has strengthened in recent years. This is bolstered by its growing role as the leading global multilateral export credit and investment insurance corporation that...

On the 21st of July 2021, Maybank Islamic announced the launch of its comprehensive Islamic wealth management (IWM) solution that covers wealth creation, accumulation, protection, purification and distribution.  Why it Matters?  The solution will provide a single touchpoint for Maybank Islamic to meet its customers’ wealth management needs as they go through life. Further, over the past few years, high net worth, affluent and emerging affluent customer segments within Maybank Islamic have seen average gro...

Malaysia-based Hextar Global has entered into a consortium agreement with local firms, Arcadia Acres and Ihsan Equity to form a Shariah-compliant digital bank. This agreement is pursuant to the submission for a digital banking licence application to Bank Negara Malaysia on the 30th of June 2021. Why it Matters?  This is the first time these three parties are in collaboration and they believe that the unconventional approach and experience, together with a focus on eco-systems, will enable a better understanding of the require...

In a significant rebound since the pandemic, non-oil bilateral trade between the United Arab Emirates (UAE) and Bahrain has increased by 75% year-on-year (YoY) in the second quarter of 2021 (2Q 2021). Meanwhile, UAE-Bahrain trade amounted to a total of USD 672 million in 2Q 2021, amounting to 40% of Bahrain’s USD 1.69 billion trade with the Gulf Corporation Council (GCC), in 2Q 2021. This data was made available, according to the latest figures released by Bahrain’s Information & eGovernment Authori...

S&P Global Ratings (S&P) has cut Kuwait’s rating by one notch to A+ from AA- whilst keeping its Outlook on the country as Negative. According to S&P, Kuwait had a central government deficit of 33% of gross domestic product (GDP) by the end of fiscal year ended March 2021. S&P predicts this deficit to average 17% of GDP per year from 2021 to 2024.  Why it Matters? In 2020, Kuwait was hit hard with lower oil prices and the impact of COVID-19. Added to this, opposition wit...