The World Bank (WB) predicted that 2020 would be a downturn year for Malaysia with forecasted GDP growth at negative 0.1%, a significant drop from its previous GDP target of 4.5%. This substantial revision comes on the back of the gross uncertainty created by the COVID-19 and its impact on the Malaysian economy.  Expenditure by the Government of Malaysia was expected to increase on the economic stimulus package and other critical initiatives required to mitigate the economic and health impacts of the virus on the econ...

During a limited cabinet meeting held on the 30th of March 2020, Indonesian President Joko Widodo (Jokowi) stated that the Government of Indonesia will prepare economic stimulus and social safety net programs in the near-term, to assist micro small and medium enterprises (MSMEs) and other informal businesses affected by COVID-19. MSMEs are considered to be the most affected sector by the on-going COVID-19 pandemic, contrary to the strong economic support offered by the sector during the 1998 economic crisis in Indonesia.&n...

The Department of Statistics Malaysia (DSM) forecasted a slowdown in Malaysia’s economic growth in the months ahead since the Leading Index (LI) which measures the economic direction showed 0.7% YoY growth in January 2020 as compared to a 1.9% YoY growth in December 2019. Datuk Seri Mohd Uzir Mahidin, Chief Statistician stated that the index for January 2020 did not account for the impacts of COVID-19 which had directly impacted the Malaysian economy since late January 2020. He added that the negative economic impact...

Moody’s Investors Service (Moody’s) is of the view that the global Islamic finance market will continue to grow in 2020 and thereafter, backed by performance from the GCC countries, as well as Malaysia, with both regions expected to drive growth in Shariah-compliant financial products.  Nitish Bhojnagarwala, VP-Senior Credit Officer at Moody’s, stated that although the downside risks are high due to the prolonged impacts of COVID-19, Moody’s expected global Sukuk issuance to remain stable at US...

Malaysian property development company LBS Bina Group (LBS) has issued MYR 130 million worth Perpetual Sukuk Musharakah. This is the first tranche of LBS’ MYR 700 million Sukuk Program, which is set to mature in March 2120. According to the IslamicMarkets Sukuk Monitor, the first tranche of the Sukuk carries a profit rate of 6.8%, with the first profit distribution due on the 30th of September 2020. The proceeds from the issuance are expected to be utilized for LBS’s capital expenditure, refinancing of existing financing/borrowings, asset...

PT Bakrie & Brothers (BNBR), which is an Indonesia based company, plans to issue a Global Sukuk worth up to USD 2 billion to finance a USD 2.8 billion power project, with a capacity of 2,660 megawatts. Director of Finance at BNBR, Amri Aswono Putro stated that BNBR is planning to issue the Sukuk in Malaysia, which is a mature Sukuk market.  BNBR expects to issue the Sukuk through YTL Corporation (YTL), a Malaysian company which is also BNBR’s partner in a joint venture named PT Tanjung Jati Power Company based in Indones...

Dubai based shipping and logistics company, Gulf Navigation (GN) has received shareholders’ approval to issue AED 125 million Sukuk through a private placement. Funds raised from the five-year non-convertible Sukuk are expected to be used for the settlement of dues to suppliers, payment of overdue salaries, advance payments to preserve contractual obligations and to meet capital expenditure requirements, among others. In a recent statement by GN, it stated that the Sukuk issuance will be offered to qualified investors only, while some of the ex...

Spokesperson for the Iranian administration, Ali Rabiei, announced that Iran’s Coronavirus Fight National Headquarters has decided to allocate IRR 1,000 trillion, to protect the businesses and people affected by the COVID-19 pandemic. According to Rabiei, a sum of IRR 750 trillion has been allocated to maintain jobs and protect the enterprises and businesses that have been affected by the on-going crisis. While this amounts for a sizable chunk of the relief package, another IRR 120 trillion is expected to be allocated towards the enhancement...

Bank Negara Malaysia (BNM) announced that family Takaful participants and life insurance policyholders will be given the option to defer their regular payments for three months without affecting their policy coverage. Additionally, life insurers and family Takaful operators should assist their policyholders with other benefits including extension of the grace period to reinstate a policy/certificate that has lapsed, waiving of fees and charges for any amendments to policies/certificates and waiver of any penalties/consequences for late payments of premiums/contributions p...

On the 25th of March 2020, the Islamic Financial Services Board (IFSB) issued an Exposure Draft (ED-25) of a Standard on Disclosures to Promote Transparency and Market Discipline for Takaful/Retakaful Undertakings. The IFSB expects to receive comments from regulatory and supervisory authorities, international organisations, institutions offering Islamic financial services, academics and other interested parties.  The ED-25s main objectives are as follows:   Facilitating access to timely and reliable information by Takaful operators and Takaful participan...