Green Bond and International Financial Markets: Spillover, Co-movement and DiversificationSukuk

RAM Ratings (RAM) has assigned a preliminary AA3/Stable rating to Exsim Capital Resources’ (Exsim Capital) proposed MYR 323 million Tranche 2 Islamic medium-term notes (IMTN) under its MYR 2 billion Sukuk Musharakah Programme (IMTN Programme).  Exsim Capital is a subsidiary and special-purpose vehicle of Exsim Development (Exsim Group). The IMTN Programme enables monetization of progress billings by Exsim Group, where it will sell its beneficial interest under sale and purchase agreements (SPA) related to property development projects to Exsim Capital...

Moody’s Investors Service (Moody’s) has affirmed the long-term and short-term issuer ratings of Masraf Al Rayan (MAR) at A1/P-1. Concurrently, Moody’s has placed the long-term and short-term bank deposit ratings of Al Khalij Commercial Bank (AKCB) at A3/P-2 on review for upgrade. MAR’s long-term issuer ratings’ Outlook remains Stable.  The rating action follows the progress made by MAR and AKCB in seeking approvals following their merger announcement in January 2021. The merger is expected to be completed in the first half...

In a recent report on the 28th of April 2021, Fitch Ratings (Fitch) states that sovereign Sukuk issuance will likely be fuelled by countries’ needs to diversify their funding sources and to meet imminent maturities alongside demand from investors.  Why it Matters?  Economic recoveries and higher oil prices amongst other factors could lead to lower requirements for funding for sovereigns in 2021. However, one-off or infrequent issuances are expected to add to 2021 volumes. In 2020, total Suk...

On the 29th of April 2021, the Indonesia Stock Exchange (IDX) together with the Shariah Economic Community (MES) launched an index called IDX-MES BUMN 17. This index measures the performance of 17 shares of state-owned enterprises (BUMN) and their affiliates. It is expected that the index would propagate Shariah principles along with healthy liquidity, large market capitalisation and solid corporate fundamentals.  Why it Matters?  At the moment, there are only three Islamic-themed indices in Indonesia. This addition is a wel...

Comparing Law Making Process by Islamic Finance Dispute Resolution System in the UAE and MalaysiaIslam, Islamic banking, Waqf

Financial institutions have a more complex path towards ‘net zero’ targetingA working paper from researchers at Banque de France shows how changes to align central bank collateral requirements with a ‘2 degree alignment’ could work Changes to central banking rules on seemingly obscure topics such as collateral eligibility can have cascading impacts throughout sector Central banks are a key part of the ‘net zero’ plan because the time frames over which action is needed works well with the measured pace of change that fit within their m...

ASEAN's regional taxonomy will cover both green and transition-related issuesWith joint EU-China 'common ground' taxonomy report expected to be released later in 2021, national taxonomy development is likely to grow rapidlyProliferation of national taxonomies will create fragmentation, opportunities for greenwashing and increasing the need for regional coordination The new ASEAN taxonomy under development could be an important marker of the next phase of taxonomy development, centered on both financing green activities and raising definitions around the transition of unsustainabl...

Fitch Ratings (Fitch) has affirmed the Long-Term Issuer Default Rating (IDR) of Ahli United Bank (Kuwait)'s (AUBK) at ‘A+’ with a Negative Outlook. In addition, Fitch has affirmed AUBK’s Viability Rating (VR) at ‘bbb-’.   Ratings Rationale   AUBK’s IDR is driven by support from the Kuwaiti sovereign, which is rated AA/Negative. The Support Rating (SR) of '1' and Support Rating Floor (SRF) of 'A+' are indicative of Fitch’s expectation of high probability of support provided by Kuwaiti authorities to all domest...

RAM Ratings (RAM)’s outlook on the Malaysian insurance and Takaful sector remains stable despite COVID-19 and the consequent Movement Control Orders (MCOs) having adversely impacted the performance of insurers and Takaful operators in Malaysia in 2020. The overall effect has still been manageable thanks to a strong rebound in the second half of 2020, as restrictions eased and as players started adapting to the new normal.  Why it Matters?  Going forward, insurance and Takaful industry capitalisation should stay sound, despit...