The Islamic banking industry in Turkey is expected to grow in the medium-term driven by its strategic relevance to the government, above-sector-average growth backed by the admission of three state-owned banks, and Turkey's favourable demographics. While a difficult operating environment coupled with low public awareness, restricted segment distribution channels, and a lack of product standardisation would limit expansion, according to Fitch Ratings. Why it Matters?   Islamic banks account for 7.8%, 6.9%, and 10.5% of Turkey's banking industry’s assets, loans, and deposits,...

Environmental, Social, and Governance (ESG) bond funds’ sustainability levels can’t be measured by ‘green bond’ share. They require a more thorough comparison of the investors’ sustainability theory of change against the fund’s ESG policies & implementation investments. An analysis of the ESG bond market has found a surprisingly small proportion of assets were invested in green bonds in most fundsSome ‘dark green’ funds had limited green bond exposure, but that may not be as indicative of the fund’s ‘green-ness’ as appe...

Abu Dhabi Islamic Bank (ADIB) has announced its arrangement and structuring of an AED 495 million (USD 135 million) Shariah-compliant transaction for the construction of two Very Large Gas Carriers (VLGCs) for Al Seer Marine and BGN International’s joint venture, ABGC, on the 11th of May 2022.  Why it Matters? The facility will fund the construction of two 86,000 cubic meters VLGCs to be built by Hyundai Heavy Industries. In March 2022, construction began on the first vessel, Lucky Gas, to be delivered in March 2023, while construction on the second vessel, North Gas, begins in...

Southeast Asia's Islamic banking market, valued at USD 290 billion, is anticipated to witness a compound annual growth rate of about 8% over the next three years, led by Malaysia and Indonesia, as per a report published by S&P Global Ratings on the 11th of May 2022, titled "Growing Belief In Southeast Asia's USD 290 Billion Islamic Banking Market."  Why it Matters?  Southeast Asia accounts for 17% of the USD 1.7 trillion valued global Islamic banking assets, representing the world's third-largest Islamic banking market. Due to strong demand, Islamic banks in Malaysi...

Saudi Arabia’s national shipping carrier Bahri (formerly known as the National Shipping Company of Saudi Arabia (NSCSA)) has announced its intention to issue SAR 3.9 billion (USD 1.04 billion) worth of SAR-denominated Sukuk, according to a bourse filing made on the 10th of May 2022. Why it Matters?  The issuance comes after a board decision made on the 9th of May 2022 and will be used to refinance the company’s existing Sukuk expected to mature in July this year, subject to the relevant regulatory authorities’ approval. Details Created in 1978, Bahri is 22% owned by th...

Malaysia’s insurance and takaful sector is anticipated to maintain resilience despite investment volatilities and the normalisation of claims experience as the country approaches the endemic status, according to RAM Ratings. Why it Matters? Malaysia’s insurance and takaful sector’s stable outlook has been maintained by RAM Ratings. In 2022, the life and family takaful segments’ new business growth is predicted to be 10% and 20%, respectively, after the sector recovered strongly from the pandemic effects in 2021. General insurance and takaful players' claim...

The Saudi Arabian airline Flynas (formerly Nas Air) announced that it had obtained a SAR 844 million (USD 225 million) Murabaha financing, as the first tranche under a SAR 2.25 billion (USD 600 million) financing programme, targeted at enhancing future expansion plans, in a statement issued on the 9th of May 2022. Why it Matters? The facilities are expected to improve the Kingdom of Saudi Arabia’s (KSA) air transport sector and speed up the implementation of the civil aviation strategy, which aims to increase the annual passenger traffic in the KSA to 330 million passengers...

The complexity of the European Union's (EU) Sustainable Finance Disclosure Regulation will make taxonomy alignment a central focus for many end-investors, and this will affect how intermediaries investThe binary nature of the taxonomy will focus investor efforts on how to improve their taxonomy alignment at the margin, which could reduce the real economy impact of engagementAs taxonomy alignment reporting is phased in, non-European investees may paradoxically benefit less in the short-run by aligning Environmental, Social, and Governance (ESG) practices with EU standards and by making na...

The Federal Government of Nigeria has approved an NGN 3 billion (USD 7.1 million) Sukuk fund in 2022 to finance the Numan-Jalingo Road rehabilitation project in the states of Adamawa and Taraba, as announced by Mu'azu Sambo, Minister of State for Works and Housing on the 7th of May 2022 during an inspection of federal road projects within the two states.  Why it Matters?  As a part of the Maiduguri-Calabar Highway, the Numan-Jalingo road runs for 103 kilometres and acts as Nigeria’s North-eastern axis’ sole connection between the North and South. The road se...

Sukuk issuances in the United Arab Emirates (UAE) witnessed a 76% increase to USD 1.25 billion globally at the end of the first quarter of 2022 (1Q 2022), compared to USD 710 million at the end of the first quarter of 2021 (1Q 2021), according to Bashar Al-Natoor, Global Head of Islamic Finance at Fitch Ratings. Why it Matters?  The rise in oil prices has led to a decline in new financing needs. However, governments and institutions continue to issue Sukuk, despite the abundance of liquidity, to diversify financing sources and maintain activity in the market. Despite the ris...