Small Medium Enterprise Development Bank Malaysia Berhad (SME Bank) has secured MYR 536 million (USD 120.33 million) from its most recent sustainability Sukuk issuance, surpassing its MYR 300 million (USD 67.35 million) planned target, as per a statement on the 25th of July 2022.Why it Matters? Despite difficult market conditions and profit rate hikes, the Sukuk was priced at a competitive profit rate of 4.04% and saw strong demand from local financial institutions, fund managers, insurance companies, and government-affiliated investment firms. Only projects relating to environmental,...

After the Gulf region overcame the COVID-19 pandemic, it is now time to mention how the fixed-income market and the loan market interacted with the region’s companies during the first half of 2020. How did the companies deal with the shortage of liquidity? And how were some of them able to enhance their cash coffers through revolving credit facilities?Let us summarise the situation back then: Gulf companies with low credit ratings were forced to borrow in local currencies through bank loans after international banks preferred those with higher credit ratings.Fixed income markets w...

The Central Bank of Oman (CBO) has announced that it is working to establish a number of Islamic money market instruments in its efforts to fulfil the liquidity demands of the Islamic banking industry, including a Shariah-compliant emergency liquidity support facility, a lender of last resort (LOLR) facility and a Wakalah-based remunerative deposit facility, among others, as per the CBO’s Financial Stability Report 2022. Why it Matters? The CBO has supported Islamic finance since its introduction in the country in 2012, creating a thorough regulatory framework for Islamic b...

The Islamic Development Bank (IsDB) has announced that it has appointed Dr Hiba Ahmed as Director-General of Islamic Solidarity Fund for Development (IsFD) as of the 6th of July 2022. Why it Matters?  Dr Hiba has a long career holding a variety of roles at organisations such as the International Food Policy Research Institute, the World Bank, the Saudi Arabian Oil Company (Saudi Aramco), the United Nations Development Program, and the Central Bank of Sudan. She served as Director General of Sudan's General Authority for Investment and Private Sector Development in 2019, followed...

Qatar’s Islamic finance institutions are expected to grow in 2022 as the country continues to experience economic expansion prompted by its preparations to host the FIFA World Cup 2022 and its Islamic finance sector is thought to be well-positioned to overcome persistent obstacles, according to Oxford Business Group (OBG). Why it Matters? The 2022 FIFA World Cup has been a significant driver of financing and insurance over the past ten years and as it draws closer, many companies and individuals are looking at market prospects. With economic recovery picking up speed despit...

Pakistan's Federal Minister for Finance and Revenue, Miftah Ismail, met with eminent Islamic scholars at the Finance Division to discuss the incorporation of Shariah into the financial system and the abolition of Riba in the country, as per a statement issued by the Ministry of Finance and Revenue on the 19th of July 2022. Why it Matters? The meeting evaluated the current condition of the country’s financial system and Islamic finance operations, the Supreme Court's order, and the ruling of the Federal Shariat Court in the Shariat petition. Suggestions were made for designi...

Stress testing often involves resilience to a single event, comparing projected losses with capital levels. In climate stress tests, the dollar value of projected loss is often much less informative than the qualitative gaps of internal capacity, governance and data quality they can expose, which are harder to reinforce than financial capital buffers. Climate stress testing has moved up regulators’ agendas but shouldn’t be seen as just another stress testAssuming that climate change is a ‘stress event’ that just has to be weathered understates the permanence of cli...

Saudi Arabia-based Dar Al Arkan Real Estate Development Company (DAAR) has issued Sukuk worth USD 400 million with a three-year tenure on the 30th of June 2022, as per a statement. Why it Matters? The offering represents DAAR’s 12th market issuance and has witnessed strong interest from both domestic and foreign investors. Proceeds from the issuance will be used to further support the company's development objectives and pipeline of projects.Details  The joint lead manager for the issuance was Bahrain-based GFH Financial Group, alongside other parties. ...

Malaysia-based IJM Corporation Berhad has announced the issuance of MYR 360 million (USD 81 million) nominal value Sukuk Murabahah via its wholly-owned unit, Fairview Valley Sdn Bhd (Fairview Valley), and under the Islamic Medium-Term Notes Programme, as per a statement made on the 18th of July 2022. Why it Matters? The offering, which represents Fairview Valley's inaugural Sukuk Murabahah issuance, followed the signing of a subscription agreement between Fairview Valley Sdn Bhd with CIMB Investment Bank Berhad and CIMB Islamic Bank Berhad. The transaction featured sustainability...

The Russian Federation (Russia) is in the process of drafting a new law regulating Islamic banking in the country in an effort to entice investors from Muslim-majority countries and fulfill local demand, as reported by the Russian newspaper Kommersant. Why it Matters? The introduction of Islamic banking in Russia has long been a topic of discussion. According to the Chairman of the State Duma Committee on Financial Market, Anatoly Aksakov, submission of the draft law to the Lower House could take place by the end of the week. As per the new law, non-credit banking institutions wo...