Reports and Articles

Omani government’s first retail sukuk issuance increases Islamic finance penetration

On 10 November, the Government of Oman's (Ba3 negative) Ministry of Finance announced a OMR25 million ($65 million) sukuk issuance, the government’s first sukuk issuance available to retail investors1 . The issuance is credit positive…...

November 16, 2020

Moody’s discuss sovereign credit perspectives related to the Kingdom of Saudi Arabia

In this exclusive episode of the Moody's podcast for IFN, Christian de Guzman and Alexander Perjéssy discuss sovereign credit perspectives related to the Kingdom of Saudi Arabia....

November 11, 2020

Tightening liquidity will hinder recovery of receivables, eroding profitability

Insurers in the Gulf Cooperation Council (GCC) countries are more exposed than their European peers to the risk of recoverability of their receivables over the next 12-18 months, as their counterparties' liquidity tightens across the…...

November 5, 2020

Enhanced awareness and regulation will fuel growth in largest African Muslim market

Islamic finance penetration is very low in Nigeria but is starting to gain a foothold as the authorities seek to increase banking penetration in the country's large Muslim population. The Central Bank of Nigeria (CBN)…...

November 2, 2020

Higher government efforts remain key to gear up the sector for growth

Islamic banking remains nascent in North Africa, largely for historical and political reasons. In recent years, however, many governments have started to lay out legal and regulatory frameworks that will set the stage for expansion,…...

November 2, 2020

Africa’s vast financing needs will drive growth in Islamic finance

Islamic banking has made little headway in Africa despite the continent's large Muslim populations. For example Sub-Saharan Africa has around 16% of the world's Muslim population but its Sharia-law compliant banking assets make up only…...

November 2, 2020

More banks converting into Islamic banks is credit positive for the sector

Since the start of 2020, Bangladesh Bank (BB), the central bank of Bangladesh, has approved the requests of three banks to convert to Islamic banks, indicating an increase in the central bank's willingness to allow…...

October 28, 2020

Merger of state-owned banks’ Islamic subsidiaries will be credit positive for Islamic banking

On 12 October, Bank Negara Indonesia (P.T.) (BNI, Baa2 stable, baa31 ), Bank Raykat Indonesia (P.T.) (BRI, Baa2 stable, baa2) and Bank Mandiri (P.T.) (Mandiri, Baa2 stable, baa3), together with their Islamic subsidiaries, signed a…...

October 20, 2020

Shift to Islamic finance continues apace despite challenges facing the economy

Saudi Arabia is the world's largest market for Islamic finance. Despite the pandemic-induced economic recession and sharp oil price decline, we expect the ongoing shift to Shariahcompliant finance in Saudi Arabia to continue over the…...

September 29, 2020

Coronavirus-related drop in claims drives strong H1 profit, but pressures persist

Saudi Arabia’s (A1 negative) 31 active primary insurers reported a sharp increase in profitability in the first half of 2020, as claims reduced significantly as a result of coronavirusinduced “lockdown” measures. However, we expect future…...

September 29, 2020

Islamic asset managers show resilience to coronavirus pressures

Coronavirus-related economic and market upheavals have strained Islamic asset managers’ revenue and cash flow, but the sector has remained relatively resilient thanks to persistently strong demand for Shariah compliant investments. Growth in Islamic assets under…...

September 29, 2020

Saudi Electricity’s green sukuk highlights investor appetite for sustainable finance

On 10 September 2020, Saudi Electricity Company (SEC, A2 negative) finalised the terms of a multi-tranche $1.3 billion green sukuk. SEC reported an order book of more than $5.2 billion for the offering, highlighting the…...

September 15, 2020

Slow growth and low oil prices are key challenges for GCC asset managers

The profitability of asset managers in most Gulf Cooperation Council (GCC) countries will face moderate to high pressure over the next 12-18 months, reflecting the coronavirus crisis and an accompanying drop in oil prices. These…...

September 7, 2020

Moody’s sovereign sukuk primer – Saudi Arabia

In Moody’s view, Saudi Arabia’s (A1 negative) credit profile is underpinned by the government's robust but deteriorating balance sheet, and supported by substantial external liquidity buffers. However, government revenue remains vulnerable to declines in oil…...

September 1, 2020

Characteristics of asset-based sukuk

Sukuk come in two forms, “asset-based” and “asset-backed”. Asset-based sukuk, despite having assets in their structure, are effectively a pass-through of the unsecured credit risk of the obligor. The obligor may be a corporate, bank,…...

August 18, 2020

Jump in funding needs drives sukuk issuance, even with decline in funding mix

A recovery in market conditions and an increase in the gross borrowing requirements of the world's largest sukuk sovereign issuers will lead to a rise in nominal sukuk issuance this year greater than we had...

August 11, 2020

Structural features will underpin Islamic banks’ resilience against coronavirus fallout

Economic disruptions from the coronavirus will be detrimental to Islamic banks, but a concentration on retail financing and other structural features will help them withstand financial stress...

August 11, 2020

Sukuk issuance set for modest decline despite coronavirus outbreak

We expect sukuk issuance to fall by just 5% this year, despite the Coronavirus outbreak, reversing four consecutive years of rapid growth. Some $77 billion in sukuk was issued in the first six months of...

August 6, 2020

GCC and Malaysia will drive growth across Shariah-compliant products in 2020

The Islamic finance sector remains underrepresented in the global financial system and has ample room to expand. We expect it will do so in 2020 and beyond as demand for Shariahcompliant financial instruments continues to...

March 30, 2020

Islamic banking poised for rapid growth despite a slow start

We expect Turkey's Islamic banking assets to double over the next five to 10 years to 10% of total banking assets from a low base of current 5.8% as the government injects new momentum into...

January 27, 2020

Legal and regulatory shortfalls, coupled with growing asset risks, will limit growth

Islamic banking in Bangladesh has ample growth potential, underpinned by a robust domestic economy and an expanding population with a large pool of untapped customers. However, a lack of comprehensive legal and regulatory infrastructure, coupled...

September 30, 2019

GCC asset managers benefit from economic diversification, foreign investment

The asset management industry in the Gulf Cooperation Council (GCC) countries is set to grow at a steady pace over the next decade, supported by the region's increased diversification away from oil, and by new...

September 17, 2019

Sukuk market continues to grow – H1 2019 Update

We expect total sukuk issuance of around $130 billion in 2019, at the top end of the $120-$130 billion range we projected at the beginning of the year, and up from $123 billion in 2018...

August 26, 2019

Increasing government efforts position the sector for rapid expansion

Islamic banking in Commonwealth of Independent States (CIS) countries remains underdeveloped, although the region has a large Muslim population. Governments, however, are stepping up efforts to develop the sector by laying out legal and regulatory...

August 15, 2019

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