The demand for Islamic bonds or Sukuk is predicted to continue growing steadily as more investors look for opportunities that are in line with Environmental, Social, and Governance (ESG) investing and that also generate reliable income. Why it Matters? According to Hanifah Hashim, Head of Fixed Income and Sukuk (Malaysia) at Franklin Templeton, one of the major contributing factors to the popularity and expansion of Sukuk, has been its impressive performance with consistently lower volatility, compared to conventional bonds. Sukuk also offers investors exposure to the fast-growi...

Bank Negara Malaysia (BNM) issued a policy document on Bancassurance and Bancatakaful on the 30th of June 2022 which outlines the requirements and guidelines for Bancassurance and Bancatakaful arrangements. Why it Matters? The policy document will go into effect on the 1st of January 2023, except paragraphs 9.12 to 9.14 which will take effect right away on the date it is issued. This is applicable to licensed insurers, licensed banks and licensed investment banks under the Financial Services Act 2013, licensed Takaful operators and licensed Islamic banks under the Islamic Fi...

Export-Import Bank of Malaysia Berhad (EXIM Bank) has announced the appointment of Arshad Mohamed Ismail as the new President and Chief Executive Officer (CEO) of the bank, effective on the 1st of August 2022. Why it Matters? According to EXIM Bank Chairman, Datuk Azman Mahmud, Arshad brings a wealth of multijurisdictional banking and finance experience, particularly in corporate banking, debt capital markets, Islamic finance, asset management, and development finance. His most recent appointment was as the President/Group Chief Executive Officer of Bank Pembangunan Malaysia Berhad (...

Islam permits only for legitimate business as Quran tells us, "O you who believe: Eat not up your property among yourselves unjustly except it may be trade among you by mutual consent"(part no 5, surah no 4 verse no 29.)Islamic Principles for Business Islam has given us a proper mechanism and guidelines for living and doing fair business. We must have strong belief and faith that every guidance has underlying moral values and benefits for us. The Shariah framework to conduct business encourages us to comply with fair and ethical practices. These Islamic teachings are not only for Muslims...

Bahri, previously known as the National Shipping Company of Saudi Arabia (NSCSA), announced the full redemption of its sukuk worth SAR 3.9 billion, due on July 30, 2022, according to a bourse filing.  Why it Matters?  The payment process was funded through sukuk refinancing with the same amount and whose completion was announced on July 6.  Details  This sukuk transcation will likely reflect on Bahri’s financials for Q3 2022 The sukuk is SAR-denominated and the transcation was made via private placement offer The returns will...

Increasing concerns about greenwashing within ESG have led to suggestions that the term should scrapped or have its definition significantly narrowed. However, the world is complex, and aspirations around covering environmental, social and governance issues won’t benefit from ignoring that complexity, leading rather to short-term gain but long-term pain. By Blake Goud, CEO, RFI Foundation ESG is facing a crisis of confidence driven by marketeers ‘hijacking’ it and conflating ESG & impact.The backlash against over-promising & under-delivering has provoked a...

The institutional structure of the ideal Islamic economy rests on rules governing property, production, exchange, trust, markets, and distribution and redistribution, among others.Property RightsAll property ultimately belongs to the Creator, who has made all created resources available for humans, to empower them to perform what their Creator expects of them. Individuals are free to acquire and accumulate property as long as it does not violate the rights and the interests of the society and individuals. Islam prohibits the concentration of wealth and imposes limits on cons...

Indonesia-based telecommunication service provider, PT XL Axiata Tbk (XL Axiata), has announced plans for a public offering of IDR 1.5 tillion (USD 100.2 million) Shelf-registration Sukuk Ijarah III Phase I Year 2022, under the IDR 5 trillion (USD 334 million) Sukuk Ijarah Shelf Offering Programme (Penawaran Umum Berkelanjutan or PUB) on the 27th of July 2022. Why it Matters? Proceeds from the offering will be used to fund XL Axiata’s capital expenses, expanding its product network and enhancing the users' access to its telecommunication service. It will further assist...

Saudi Arabia’s National Debt Management Center (NDMC) has announced the closure of an SAR 2.9 billion (USD 771 million) SAR-denominated Sukuk issuance on the 26th of July 2022, under the Saudi Arabian Government SAR-denominated Sukuk Programme. Why it Matters? The offering comprised two tranches; the first tranche had a size of SAR 480 million and the second tranche was sized at SAR 2.45 billion, with the two tranches set to mature in 2030 and 2034, respectively. Details  In June 2022, the NDMC closed an SAR 5.44 billion (USD 1.5 bill...

The first Shariah-compliant Electronic Warehouse Receipt (EWHR) financing in Pakistan has successfully been structured and disbursed by BankIslami Pakistan Limited (BankIslami), issued under the repository system and the management of Naymat Collateral Management Company Limited (NCMCL). Why it Matters? Pakistan's economy is supported by agriculture providing food security. In 2019, the Securities & Exchange Commission of Pakistan (SECP) adopted Collateral Management Company (CMC) Regulations to foster a supportive atmosphere and accredit warehouses to store various comm...