With the anticipation of an economic recovery from the July-September 2020 quarter (Q3 2020), Bank Indonesia (BI) expects a further strengthening of the Indonesian Rupiah (IDR) in 2021. Perry Warjiyo, BI Governor, stated that the IDR would strengthen further to reflect its fundamental value (given that it is currently fundamentally undervalued), with an attractive domestic yield supporting the economic recovery.  According to local media reports, March 2020 saw the IDR depreciate 18% in that month itself, with a spike in off-risk sentiment due to the u...

According to Kuwait-based, Kamco-Invest (KI), the top-and bottom-lines of Islamic banks within the Gulf Cooperation Council (GCC) region are likely to be less affected by the impacts of COVID-19 compared to conventional lenders in the region. Given that the conventional banks in the GCC have experienced higher growth rates at over 10% in assets and deposits in 2019 (compared to Islamic banks in the GCC which saw assets and deposits grow at around 8% in 2019), KI expects the pandemic to impact the conventional banks to a greater extent in the near term.  KI stated that t...

RAM Rating Services (RAM) has upgraded the rating of Tranche 1 (MYR 215 million) issued under MBSB Bank (MBSB)’s Structured Covered Sukuk Murabahah to AAA from AA1. At the same time, the ratings of Tranches 2, 3, and 4 have been reaffirmed at AA1. All ratings have a Stable Outlook.  MBSB’s Structured Covered Sukuk is a dual recourse instrument, with direct recourse to MBSB as a senior unsecured debt obligation upon default, as well as to the relevant Tranche Cover Assets which comprise personal financing facilities for c...

PT Pegadaian (Pegadaian), plans to raise IDR 2 trillion through the issue conventional sustainable securities (IDR 1.5 trillion) as well as IDR 500 billion in sustainable Sukuk Mudarabah. Based on information released in the prospectus on the 22nd of June 2020, the funds will go towards meeting additional working capital requirements.  The securities will be issued in three tranches. Series A of the Sukuk Mudarabah will have a principal value of IDR 316.5 billion, a 370-day term and a profit rate of 6.75%. Meanwhile, ...

Moody’s Investors Service (Moody’s) has assigned a Ba2 rating to DP World Salaam (DPWS)’s proposed reset subordinated perpetual Sukuk certificates, along with a Stable Outlook. DPWS is a special purpose vehicle established by DP World (DPW). Moody’s has also assigned the same rating for the proposed benchmark sized reset subordinated perpetual notes. The proposed perpetual notes and Sukuk certificates are collectively referred to as hybrid instruments.  The assigned Ba2 ratings ranks two notches below DPW’s Baa3 senior uns...

Saudi Aramco Total Refining and Petrochemical Company's (SATORP) subsidiary, Arabian Aramco Total Services Company (AATSC) has announced on the 22nd of June 2020 that it will partially redeem its semi-annual Sukuk Musharakah. A total amount of SAR 138.7 million representing 3.7% of the total nominal value of the company’s Sukuk was distributed, according to the redemption schedule of the Sukuk prospectus issued on the 10th of September 2011 and approved by the Capital Market Authority of Saudi Arabia. Thus, the nominal value of each Sukuk will be SAR 63,760 a...

Fitch Ratings (Fitch) has predicted the standalone credit profiles of the banks in the United Arab Emirates (UAE) to weaken in 2020 as a result of the COVID-19 pandemic and lower oil prices, although the Central Bank of the UAE has unveiled timely support programs. The ratings agency stated that banks' profitability will be compromised as a result of lower interest rates, lower non-interest income driven by subdued business volumes and higher impairment charges on financing facilities. Meanwhile, Fitch expects asset quality of UAE banks to also weaken, since not all borrowers will be ab...

Given the market and economic instability as a result of the COVID-19 pandemic, together with declining oil prices, investors have shown a great deal of faith in Nigeria 's debt market. The country’s Debt Management Office (DMO) recently announced an oversubscription of the third sovereign Sukuk, which was offered at NGN 150 billion to investors. According to the DMO, the third sovereign Sukuk attracted a high level of subscription from investors, with total subscriptions of NGN 669.124 billion, resulting in a subscription level of 446%. According to the DMO, t...

RAM Rating Services (RAM) has predicted Malaysia’s securities market to remain bearish during the rest of June 2020. Despite the rise in foreign investment on the Malaysian securities market in May 2020 following three consecutive months of net outflows totalling MYR 22.4 billion, the trend changed at the beginning of June 2020 due to the increase in COVID-19 cases in the United States of America and the resulting impact on the global economy, according to RAM.  The rating agency however stated that the recent Penjana stimulus package worth MYR 35 billion by...

Malaysian Rating Corporation (MARC) has affirmed Islamic Development Bank (IsDB)’s AAA/MARC-1 financial institution (FI) ratings, with the Outlook at Stable.  The ratings affirmation reflect IsDB’s preferred creditor status as a multilateral development bank (MDB) established by the Organisation of Islamic Cooperation (OIC) with the aim of providing financial support for OIC member nations and other Islamic communities even in non-member countries. IsDB’s preferred creditor status gives priority of debt payments to MDBs over other cre...