Fitch Ratings (Fitch) has assigned a final rating of BBB to Indonesia’s USD sovereign global Sukuk certificates issued through Perusahaan Penerbit SBSN Indonesia III (PPSI-III). PPSI-III is a legal entity in Indonesia established purely to issue foreign-currency denominated, Shariah-compliant securities for the Government of Indonesia in international markets.  The final rating corresponds with Indonesia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) of BBB (affirmed in January 2020), and replace...

According to Fitch Ratings (Fitch)’s report titled “UAE Islamic Banks: 2019 Results Dashboard”, Islamic banks in the United Arab Emirates are looking at a subdued 2020, given the anticipated lower profitability and business volumes as well as higher financing impairment charges, as a result of COVID-19 and lower oil prices. Fitch also expects asset quality to weaken, noting however, that the full impact on the banks will be camouflaged in the short-term by financing deferral programmes and regulatory flexibility allowed for banks to recognise impairments.&nbs...

Fabrice Susini, Chief Executive Officer of Saudi Real Estate Refinance Co (SRC) announced SRC’s plans for the issuance of a USD-denominated Sukuk of up to USD 5 billion by the end of 2020. The impending Sukuk issuance will mark SRC’s foray into international markets.  Susini commented on the size of the mortgage market in Saudi Arabia which stood at SAR 240 billion by the end of the first quarter of 2020, expecting this to grow to a value of SAR 800 billion by 2028. SRC purchases mortgage portfolios of banks and companies to support mortgage originat...

Saqr Nader Shah, Chief Executive Officer and Managing Director of Aljazira Takaful Taawuni (ATT), stated that ATT is in the final stages of assessing its impending merger with Solidarity Saudi Takaful (SST). Shah said that ATT has plans to implement within a certain time frame.  Shah added that ATT has potential targets from the merger namely increasing market share and profitability. According to Shah, the merger will present ATT with greater opportunities to focus on cross-selling strategies, whi...

Sarana Multigriya Finansial (SMF), a diversified entity owned by the Government of Indonesia, is planning to raise IDR 2.46 trillion from the capital market through the issuance of conventional sustainable securities worth IDR 2.11 trillion and sustainable Sukuk Mudharabah worth IDR 346 billion. According to local media reports, the Sukuk Murabahah will be the phase II of SMF’s Sukuk Mudharabah I, with a target fund of IDR 2 trillion. The Sukuk will offer a profit of 6.75% and will have a tenure of 370...

Three-quarters of the population of Organisation of Islamic Cooperation (OIC) countries are more vulnerable to climate change than the global averageIslamic financial institutions are exposed directly to climate risks and to market, credit and liquidity risks if international financial institutions pull exposure to them or to OIC markets to limit climate risksPublicly financed climate data could be a force for good or it could increase inequities if unequally distributed; global climate finance should support its adoption and integration in climate-vulnerable countries such as in Islamic...

The Dubai Gold and Commodities Exchange (DGCX) has partnered with Saudi Arabia based Albilad Capital (Albilad) to provide pricing data for Albilad’s new Shariah-compliant, gold-backed exchange traded fund (ETF) listed on Saudi Arabia’s Tadawul Exchange. The DGCX stated that the partnership intends to strengthen gold and Islamic finance markets across the region. The Chief Executive Officer of the DGCX, Les Male, stated that there has been significant investor interest for gold, particularly during crisis situations, albeit&nb...

A statement issued by Saudi Arabia’s Ministry of Finance (MoF) on the 28th of June 2020, confirmed the closure of the MoF’s SAR 8.495 billion (USD 2.27 billion) Sukuk issuance under the Saudi Arabian Government SAR-denominated Sukuk programme. The next Sukuk issuance by the MoF is scheduled for the 22nd of July 2020. The Sukuk issuances are divided into three tranches. According to the MoF, the first tranche of the Sukuk issuance is SAR 2.494 billion, with total tranche size at SAR 5.017 billion, set to mature in 2027.&...

Haj Saeed bin Ahmed Al Lootah, the founder of the world’s first Islamic bank, Dubai Islamic Bank (DIB), has passed away at the age of 97. DIB was incorporated in 1975 to provide a Shariah-compliant alternative to conventional banking. In addition to DIB, Saeed Al Lootah also established a construction company as a joint venture with his brother in 1956, the S.S. Lootah Contracting Company. Since then the S.S. Lootah Group has diversified into various industries such as food, real estate, energy, hospitality, financial servic...

Saudi Arabia has announced on the 28th of June 2020, that it will charge 15% value-added tax (VAT) on goods imported through e-commerce platforms. The Saudi Customs Authority confirmed that the new rule will be applicable on products that are shipped on or subsequent to the 1st of July 2020. Commenting on the new rule, the Managing Partner of Charterhouse Tax Consultancy, Anurag Chaturvedi, stated that all imports on or after the 1st of July 2020 will be levied with 15% VAT and in the event the online order placed before the 30th of June 2020 (cut-off date) is d...