MBSB Bank Berhad (MBSB) has announced the issuance of MYR 300 million (USD 68.49 million) sustainability Sukuk in two tranches, a 5-years MYR 200 million (USD 46.98 million) offering and a 7-years MYR 100 million (USD 23.49 million) offering, under its MYR 5 billion (USD 1.14 billion) sustainability Sukuk Wakalah programme. Why it Matters? The Sukuk represents the first sustainability Sukuk issuance in the local capital markets for a Malaysian Islamic bank. The offering proceeds will fund the bank’s green and social projects which are part of its strategic aim to actively p...

The Islamic Republic of Pakistan is said to be on the right track toward transitioning from conventional banking to full-fledged Shariah-compliant banking, as per a statement by the country’s Minister of Finance, Miftah Ismail at the World Islamic Finance Forum held virtually on 31st of May 2022. Why it Matters?  The Federal Shariah Court has recently ruled that all banks in Pakistan should convert to Islamic banking, noting that an Islamic country's economic system must be interest-free and suggesting a five-year grace period for this transition. According to Ismail,...

Egypt is preparing for the issuance of its first sovereign Sukuk based solely on state-owned assets, according to the country’s Finance Minister Mohamed Maait in a statement published on the 31st of May 2022.  Why it Matters?  Recent global economic crises have raised the importance of alternative finance, increasing attempts to diversify funding tools and lowering the cost of development investments. Egypt's plans to issue its first sovereign Sukuk is expected to help broaden the country’s investor base through attracting Arab and global investors, particul...

The United Arab Emirates’ Arada Developments (Arada) has given an 8.25% initial price guidance for a 5-year Sukuk, as per a document shown on the 31st of May 2022.  Why it Matters?  The auction will be Arada’s debut offering as well as the Gulf region's first public dollar bond sale since the Sharjah government offered Sukuk worth USD 750 million in late March 2022. The sale is anticipated to close on the 7th of June 2022 and Arada has emphasised the government's and regulatory authorities' proven support, including a loan guarantee of up to USD 436 million,...

The National Mortgage Corporation of Malaysia, Cagamas Berhad (Cagamas) has announced the conclusion of the issuance of its MYR 1.025 billion (USD 234.2 million) one-year floating bonds and Sukuk, comprising the MYR 345 million (USD 79 million) one-year floating profit rate Islamic medium-term notes (IMTNs) and the MYR 680 million (USD 155 million) one-year floating rate conventional medium-term notes (CMTNs), and bringing the company’s aggregate issuances for 2022 to MYR 7.19 billion (USD 1.6 billion), as per a statement issued on the 30th of May 2022. Why it Matters? The proceeds f...

The Egyptian Islamic Finance Association (EIFA) has reported that the Islamic banking volume in Egypt has increased by an EGP 55.2 billion (USD 3 billion) to reach EPG 434 billion (USD 23 billion) by the end of March 2022 from March 2021, witnessing a 14.6% growth rate and making up 5% of the local banking market. Why it Matters?  Egypt now has 14 banks that are licensed by the Central Bank of Egypt (CBE) to provide Islamic banking products, three of which are fully Islamic banks, namely Faisal Islamic Bank of Egypt, Al-Baraka Bank Egypt, and Abu Dhabi Islamic Bank in Egypt,...

Maybank Group’s insurance and takaful arm, Etiqa, has announced the launch of its first environmental, social and governance (ESG) fund, the Premier Global Sustainable Equity Fund (PGSEF), on the 27th of May 2022.  Why it Matters? The fund is set to deliver performance by investing in firms with sustainable investment themes linked operations over the medium to long-term period. According to Etiqa’s Chief Strategy Officer (CSO), Chris Eng, as more people are aware of the impact of climate change and the hazards associated with poor human capital management, inves...

Saudi Arabia-based Batic Investments and Logistics Company (BATIC) has announced the signing of a SAR 200 million (USD 53.3 million) Shariah-compliant facility agreement between its wholly-owned subsidiary, Batic Real Estate Company and Al Rajhi Bank, according to a bourse filing made on the 26th of May 2022. Why it Matters? The facility is expected to fund the company’s potential real estate investments, to be disclosed when the deal is executed. Several joint guarantees were provided by BATIC and Batic real estate company for the facility, backed by order notes and m...

In Brief:Portfolio decarbonisation appears to be an easier way to align with Net Zero targets, but it can limit investment in the places that most need it, such as emerging markets.  With the responsible finance market buzzing about its role in mitigating climate change and risk, there is a divide among stakeholders about what “Net Zero” in finance should includeEmerging markets – which need USD 95 trillion for a Just Transition – are especially likely to fall out of favor in ‘portfolio decarbonisation’, which could dry up investment where it&rsq...

Indonesia has completed the sale of 5-year and 10-year US dollar-denominated Sukuk worth USD 3.25 billion in the country's largest global Sukuk issuance, according to the Ministry of Finance on the 25th of May 2022. Why it Matters? The issuance, which took place amid intraday market volatility, had a coupon rate of 4.40% on the 5-year notes and 4.70% on the 10-year notes, both of which were below the sovereign's initial price guide. The total order books for the issuance reached USD 10.8 billion, with Asia and the Middle East accounting for the majority of the buyers. Deta...