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 1.1 billion.  According to a statement issued by the IILM, the Sukuk was oversubscribed by 1.50 times, with a combined order book in excess of USD 1.6 billion. The Sukuk was issued in three series: a USD 400 million issuance with a one-month tenure and a profit rate of 0.26%, a USD 500 million issuance with a three-month tenure carrying a profit rate of 0.45%, and a USD 20...

Moody’s Investors Service (Moody’s) has stated its expectation of an increase in merger and acquisition (M&A) activity across the Gulf Cooperation Council (GCC) region, citing challenging operating conditions resulting from the global economic slow-down as the main driver. Banks are now faced with larger cost adjustments, amidst constrained growth opportunities caused by low oil prices and COVID-19, according to Moody’s. As banks seek to overcome revenue pressure, Moody’s expects GCC banks to aim for greater scale, in efforts to offset the impact of lower oil...

Chairman of Bank Negara Malaysia’s (BNM) Shariah Advisory Council, Datuk Mohd Daud Bakar, has stated that although cryptocurrency is considered as a new concept in Islamic finance, BNM remains bullish with regards to it. This optimism is fueled by the proactive shift towards a digital economy in the wake of the new normal imposed by the on-going COVID-19 pandemic.  Speaking at the SCxSC Fintech Conference 2020 on the 5th of October 2020 at a panel session titled “Conundrum In Islamic Finance: Digital Assets and Shariah Compli...

Malaysian Prime Minister Tan Sri Muhyiddin Yassin has reaffirmed the country’s willingness to increase self-sufficiency in Halal food by working with other countries, particularly within the Association of Southeast Asian Nations (ASEAN).  In a speech read by Datuk Seri Mustapa Mohamed, Minister in the Prime Minister’s Department (Economy), at the World Halal Conference (WHC) 2020 held on the 6th of October 2020, Muhyiddin stated that the increase in self-sufficiency should also extend to Halal pharmaceuticals, Halal medical devices and Halal ingredients....

The global Sukuk market in 2020 has been severely impacted by the COVID-19 pandemic, with green Sukuk issuance declining by 44.4% year-on-year (YoY) during January to July 2020, according to Marina Mardi, Independent Consultant and Former Assistant Vice President of Khazanah Nasional, who was speaking at a recent virtual Sustainable and Inclusive Finance Forum organised by Bank Negara Malaysia and the World Bank Group.  Citing the World Bank Group’s October 2020 Knowledge and Research report titled “Pioneering the Green Sukuk: Thr...

An ECB Executive Board member has floated the possibility of incorporating ‘green’ considerations into asset purchase policiesAlthough the change is probably a long way off, it will spark other changes that could accomplish the same goal of integrating climate-related risks in financial marketsEfforts by central banks, regulators and others on climate change have been moved to the front burner and banks that aren’t prepared will face significant disruption Many Environmental, Social, and Corporate Governance (ESG) risks will affect the financial sector, but none so m...

Fitch Ratings (Fitch) Indonesia has assigned a National Long-Term Rating of ‘AAA(idn)’ to Bussan Auto Finance’s (BAF) proposed second-phase Sukuk issuance of up to IDR 485 billion under its first Sukuk programme with a three-year maturity. The Sukuk is rated the same as BAF’s National Long-Term Rating, as Fitch expects the issuance to represent BAF’s direct and senior obligations. Proceeds of the proposed Sukuk will support BAF’s working capital, according to Fitch.  BAF is a captive financing company that finances sales of Ya...

Guan Chong, a Malaysian-based cocoa processor, has announced plans to raise up to MYR 800 million through Islamic medium-term notes (Sukuk Wakalah) to support ongoing overseas expansion.  According to a recent Bursa Malaysia filing, Guan Chong stated it had lodged documents with the Securities Commission Malaysia to establish the Sukuk Wakalah programme, which will have a tenure of 20 years from the date of the first issuance. Proceeds of the issuance will be used to finance general working capital and capital expenditure, in addition to refinance borr...

On the 5th of October 2020, Turkey was reported to have completed legal infrastructure pertaining to its participation banking industry, according to anonymous sources as cited by local media. Under the new legislation, compliance processes based on interest-free principles that are practised in the sector, have now been put into a governance framework, jointly developed through a collaboration between the Banking Regulation and Supervision Agency, and the Participation Banks Association of Turkey.  Some of the guidelines under the new framework include the establishment of a...

Speaking to the media, Malaysia’s Finance Minister, Tengku Zafrul Aziz, stated that the Finance Ministry anticipates the country’s fiscal deficit to register at between 5.8% and 6.0% for 2020, as the authorities continue to focus on fiscal stimulus to support the economy through the COVID-19 pandemic.  To date, fiscal injections into the Malaysian economy have reached approximately 20% of gross domestic product (GDP), stated Zafrul. So far in 2020, Malaysia has turned out stimulus packages worth USD 73.3 billion (MYR 305 billion), to support the econ...