KCB Bank Tanzania Limited (KCB Bank Tanzania) has announced its plans to raise TZS 10 billion (USD 4.3 million) via its maiden public Sukuk offering, Fursa Sukuk, as per a statement made by the bank on the 9th of November 2022. Why it Matters? The offering is issued at a time when other lenders have lately opened their bonds to the financial markets and the funds will be used to finance the asset portfolio owned by KCB’s Sahl Banking. The minimum initial investment for KCB’s Fursa Sukuk is TZS 500,000 (USD 214) and it offers the opportunity for Tanzanian and non-Tanza...

The Federal Government of Pakistan will proceed with the establishment of an interest-free, Islamic banking system and withdraw appeals filed against it before the Supreme Court of Pakistan in the upcoming days, as announced by the country's Minister of Finance, Muhammad Ishaq Dar on the 9th of November 2022. Why it Matters? Since Pakistan's whole financial system, which has been in use for the previous 75 years, cannot be suddenly switched to a new system, recent efforts to impose an Islamic banking system in the country have encountered roadblocks and difficulties. The Sta...

Bank Kerjasama Rakyat Malaysia Berhad (Bank Rakyat) has announced the issuance of Islamic Medium-term Notes (IMTN) Sukuk Wakalah worth MYR 500 million (USD 106 million) in three tranches, under its MYR 10 billion (USD 2.1 billion) Senior Wakalah Sukuk Programme and via special purpose company (SPV), Imtiaz Sukuk II Berhad. Why it Matters? The issuance, which was priced on the 27th of October 2022, was successful in generating favourable demand with a bid that was 2.58 times its original amount. Bank Rakyat will utilise the proceeds from the offering for Sharia...

International best practices require issuers to obtain a credit rating from an independent entity specialising in providing credit rating services. Therefore, there is a conflict of interest if fintech companies play a close role to the credit rating (by determining the degree of risk and granting a rating) given to the Sukuk issuer who will pay them a success fee for arranging the issuance which is marketed to mostly retail investors who might not be well-versed in understanding such risks.Indeed, for the first time, those fintech companies that specialise in serving small and medium-s...

The government of Pakistan has announced the successful issuance of 5 years tenured PKR 46.44 billion (USD 210 million) Ijarah Sukuk in a new series in October 2022, against assets of the National Highway Authority (NHA). Why it Matters?  The Finance Ministry has saved millions of rupees in financial costs through successfully raising money from the Islamic banking market using Sukuk at a rate that is 100 basis points, which is less expensive than alternative traditional methods. As the nation moves toward conversion to a Shariah-compliant financial and banking system, this will...

The International Islamic Liquidity Management Corporation (IILM) has announced its reissuance of short-term A-1 rated Sukuk worth USD 1.12 billion in three series, on the 8th of November 2022. Why it Matters? The reissuance, which represents the 12th Sukuk auction by the IILM for 2022, has drawn interest from Islamic primary dealers and investors in the Gulf Cooperation Council (GCC) markets and Asia. With a total order book exceeding USD 1.71 billion and an average bid-to-cover ratio of 153%, the competitive tender experienced a strong overall demand. Details  Th...

The government of Indonesia has announced its plans for the issuance of retail State Sharia Securities (SBSN) type Savings State Sukuk (ST) Series ST009 once again, to be offered for 20 days, from the 11th of November 2022 to the 30th of November 2022, according to Ramdhan Ario Maruto, Associate Director, Head of Fixed Income, Anugerah Sekuritas Indonesia, PT on the 6th of November 2022. Why it Matters? The ST009 Series represents the sixth and last retail government bond to be issued in 2022. Despite the market still in its deepening stage, the number of investors for...

Malaysia-based Sunway South Quay Sdn Bhd (SSQ), the indirect wholly owned subsidiary of Sunway Berhad, has made a lodgement with the Securities Commission (SC) Malaysia for the issuance of MYR 2 billion nominally valued Islamic Medium-term Notes under its Sukuk Wakalah Programme and based on Wakalah Bi Al Istithmar, according to a filing with Bursa Malaysia on the 3rd of November 2022. Why it Matters? Through the programme, SSQ can issue Sukuk Wakalah in accordance with a variety of green, social, and sustainability-linked initiatives as well as responsible investment g...

Malaysia-based AEON Credit Service (M) Berhad (AEON Credit) has made a lodgement with the Securities Commission (SC) Malaysia for the establishment of its MYR 1 billion (USD 211 million) nominally valued Islamic Commercial Papers (ICP) Programme, with the first Sukuk Wakalah issuance under the Programme expected to take place within 90 working days, as per a bourse filing. Why it Matters? Proceeds from the Sukuk would be utilised to fund disbursements to clients in the regular course of business and would also pay for Programme-related expenses as well as refinanc...