The International Monetary Fund (IMF) has lowered its FY2019/20 forecast for Egypt’s gross domestic product (GDP) to 2.0% from its previous expectation of 5.5%. This is led by the negative impacts of COVID-19 and reflects the sharp slowdown in tourism and supporting industries; align with other key sectors like manufacturing, trade and real estate.  The IMF expects a rebound in the next fiscal cycle, projecting GDP growth at 6.5% in FY 2020/21, with this increasing to 5.3% in the following two fiscal periods. The recovery in FY 2020/21 is based on macroeco...

Bank Negara Malaysia (BNM) has published its’ Shariah Advisory Council’s latest rulings regarding the restructuring of Islamic financing facilities amidst COIVD-19, on its website, along with its guidelines for profit compounding upon restructuring. According to BNM guidelines, an Islamic financing facility may be restructured based on the original Shariah contract, without the need for a new agreement, by using a supplementary agreement that is cross-referred to the terms and conditions prevalent in the original agreement.    B...

Moody’s Investor Services (Moody’s) reported an 8% year-over-year (YoY) decline in domestic Sukuk issuances in Malaysia during the first half of 2020 (1H 2020), with the effect of a 28.8% YoY decline in private-sector issuances mitigated by a 39.2% YoY increase in sovereign issuances.  According to Christian de Guzman, a Moody's Senior Vice President, revenue shortfalls and the need to finance stimulus packages in the wake of COVID-19, made up for companies delaying or cancelling investment plans as a result of the on-going pandemic.  Sovereign Suk...

Despite sovereign Sukuk volumes coming in flat year-over-year (YoY) in the first half of 2020, Moody’s Investors Services (Moody’s) expects conditions to improve in the second half of 2020, as market conditions start to normalise. Moody’s expects global sovereign Sukuk issuances to increase over 40% year-over-year in 2020 to USD 92 billion.  Conventional issuances, being more expedient than Sukuk issuances, have been the preferred choice for sovereign debt management offices during the COVID-19 lockdown period. Added to this, narrowing spreads rendered S...

Moody’s Investors Services (Moody’s) has stated that concentration on retail financing, along with stable liquidity and funding profiles will support Malaysian Islamic banks and allow them to emerge resilient in the wake of the on-going COVID-19 pandemic.  The seven largest Islamic banks in Malaysia (including five that are subsidiaries of domestic banking groups with conventional operations) all have a large exposure to retail financing, which according to Moody’s is less vulnerable than business financing in times of economic downturn.  ...

Mashreq Capital, based in Dubai, United Arab Emirates, stated that its Mashreq Al Islami Income Fund (Sukuk Fund) has exceeded USD 150 million in assets under management, positioning the Sukuk Fund amongst the top five public global Sukuk funds in the Middle East.  The Sukuk Fund was established in 2009, as amongst the first Shariah-compliant global Sukuk funds in the Middle Eastern region. Since then and as of the 30th of July 2020, Mashreq Capital reports that the Sukuk Fund has generated a cumulative net return of over 87%.  The Sukuk Fund invests in...

Pakistan-based, power utility company K-Electric, announced on the 10th of August 2020, the successful closure of its PKR 25 billion Sukuk issuance, the largest Sukuk issued in Pakistan’s private sector. K-Electric had previously raised PKR 23.7 billion of the total via a pre-initial public offering (IPO) placement, with the remaining PKR 1.3 billion raised through an IPO to the general public, with a minimum per certificate subscription of PKR 5,000. With the IPO portion of the Sukuk being over-subscribed by close to 2.5 times, K-Electric was able...

According to the Revenue Regulations No. 17-2020, issued by the Philippines' Bureau of Internal Revenue (BIR) Commissioner, Caeser R Dulay on the 22nd of June 2020, Islamic banking transactions must have equality in its tax treatment when compared with conventional banking transactions, so that neither Islamic nor conventional banks are taxed more heavily or more lightly than the other.  According to the BIR, tax treatment for Islamic banking transactions will be based on their economic substance rather than legal form. Th...

According to Arifa A Ala, Managing Director at Bangko Sentral ng Pilipinas (BSP), the Philippines aims to conduct at least 30% of all transactions online or via digital platforms, as part of its strategic planning targets. Ala added that the country is open to many new ideas as well as supporting regulations that may be required to allow the introduction of new forms of digital transactions within the banking sector as well as within non-bank financial institutions. A representative from BSP has stated that the Central Bank is keen to explore p...

Indonesia has had its Long-Term Foreign-Currency Issuer Default Rating (IDR) affirmed at BBB by Fitch Ratings (Fitch), with a Stable Outlook. The rating affirmation takes into account a favourable medium-term outlook for economic growth, with Fitch forecasting Indonesia's gross domestic product (GDP) at 6.6% in 2021 and 5.5% in 2022, rebounding from an expected 2% contraction forecast for 2020.  The ratings also incorporate a low government debt-to-GDP ratio, with the general government debt burden anticipated to rise to 36.7% of GDP in 202...