Stronger economic growth in core Islamic finance countries is expected to boost industry assets about 10 per cent from 2022 to 2023.
The global Islamic finance industry continued to expand in 2021, with assets up 10.2 per cent, versus 11.4 per cent in 2020 (excluding Iran), supported by banking asset growth. The increase last year was supported by Islamic banking assets in some GCC countries and Malaysia, sukuk issuances exceeding maturities and the solid performance of the Islamic funds industry.
This year, higher commodity prices are expected to underpin a stronger recovery in many core Islamic finance markets.
Moreover, most of these countries are relatively resilient to macroeconomic shocks resulting from the Russia-Ukraine conflict. This will support the industry's prospects for 2022-2023. However, global headwinds could change the picture by continued stubbornly high inflation, lockdowns related to Covid-19, and the US Federal Reserve and other major central banks ramping up their fight to rein in the inflation.
Faster bank growth is also expected to contribute to the industry expansion. With the more supportive economic outlook for many Islamic finance countries, bank financing growth is expected to accelerate.
In Saudi Arabia, continued mortgage demand and the implementation of Vision 2030 projects will create opportunities for industry expansion. In other GCC countries, more positive economic sentiment, government spending and investments will help accelerate growth.
In South-East Asia, we expect the $290 billion Islamic banking market to expand at a compound annual growth rate of about 8 per cent over the next three years.
In 2022, we expect a decline in the total sukuk issuance compared with a stabilisation at $147.4bn in 2021, versus $148.4bn in 2020, and the 105 per cent increase in foreign-currency-denominated issuance over the same period.
There are several factors at play. Shrinking global liquidity and increasing complexity related to regulatory standards are likely to hold back sukuk issuance in 2022, assuming any adverse Covid-19-related disruption in core Islamic finance countries remains in check.
We also expect lower financing needs for some core Islamic finance countries and some corporates to remain prudent with their growth capital expenditure after slowly recovering from the pandemic.
At the same time, a more supportive economic environment and government spending are likely to create opportunities in commodity exporting countries. Moreover, local currency issuances by some governments are likely to continue as they seek to develop local capital markets and offer alternative financing avenues to their economies.
We note the total volume of issuance was down 23.2 per cent and foreign currency denominated issuance increased 12.3 per cent in the first quarter of 2022, after some issuers frontloaded their plans to benefit from market conditions prior to interest rate rises.
Many of these issuances were either from low-rated counterparties or in the form of capital-boosting instruments. Despite the decline in volumes, we expect sukuk issuance to still exceed sukuk maturing in 2022, which we estimate at about $96bn.
Although their contribution to the industry remains small, we also expect the takaful and fund sectors to expand this year. We continue to see the takaful sector expanding at an annual rate of 5 per cent to 10 per cent. Fund growth is less certain due to market dislocations since the beginning of 2022, with one-quarter of the industry equity funds and another 60 per cent money market or sukuk funds that are likely to suffer from higher global interest rates.
We also see opportunities in the alignment of certain Islamic financial products and environmental, social and governance (ESG) factors. We expect to see a higher volume of green and sustainability sukuk (from a low base) as issuers look to broaden the investor base and include funds aligned with sustainability themes.
Many Islamic finance countries are exposed to climate transition risk, and several are developing or implementing transition strategies, including significant investment in clean energy. These present real opportunities for sustainable sukuk in Islamic finance core countries.
However, the energy transition is expected to take a long time to materialise in the GCC and Malaysia, and as such sporadic recourse to green sukuk.
The social angle of Islamic finance presents another opportunity for sustainable sukuk. As the economic effects of the pandemic continue to surface in the form of higher unemployment rates, especially in fiscally constrained countries, social sukuk can help amortise the shock. These and other Islamic finance instruments could have an even bigger effect if they are leveraged properly.
Mohamed Damak is senior director and global head of Islamic Finance at S&P
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Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
MATCH INFO
Alaves 1 (Perez 65' pen)
Real Madrid 2 (Ramos 52', Carvajal 69')
Squid Game season two
Director: Hwang Dong-hyuk
Stars: Lee Jung-jae, Wi Ha-joon and Lee Byung-hun
Rating: 4.5/5
The biog
Favourite hobby: I love to sing but I don’t get to sing as much nowadays sadly.
Favourite book: Anything by Sidney Sheldon.
Favourite movie: The Exorcist 2. It is a big thing in our family to sit around together and watch horror movies, I love watching them.
Favourite holiday destination: The favourite place I have been to is Florence, it is a beautiful city. My dream though has always been to visit Cyprus, I really want to go there.
Griselda
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Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5
How England have scored their set-piece goals in Russia
Three Penalties
v Panama, Group Stage (Harry Kane)
v Panama, Group Stage (Kane)
v Colombia, Last 16 (Kane)
Four Corners
v Tunisia, Group Stage (Kane, via John Stones header, from Ashley Young corner)
v Tunisia, Group Stage (Kane, via Harry Maguire header, from Kieran Trippier corner)
v Panama, Group Stage (Stones, header, from Trippier corner)
v Sweden, Quarter-Final (Maguire, header, from Young corner)
One Free-Kick
v Panama, Group Stage (Stones, via Jordan Henderson, Kane header, and Raheem Sterling, from Tripper free-kick)
Fourth Arab Economic and Social Development Summit
As he spoke, Mr Aboul Gheit repeatedly referred to the need to tackle issues affecting the welfare of people across the region both in terms of preventing conflict and in pushing development.
Lebanon is scheduled to host the fourth Arab Economic and Social Development Summit in January that will see regional leaders gather to tackle the challenges facing the Middle East. The last such summit was held in 2013. Assistant Secretary-General Hossam Zaki told The National that the Beirut Summit “will be an opportunity for Arab leaders to discuss solely economic and social issues, the conference will not focus on political concerns such as Palestine, Syria or Libya". He added that its slogan will be “the individual is at the heart of development”, adding that it will focus on all elements of human capital.
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'The Batman'
Stars:Robert Pattinson
Director:Matt Reeves
Rating: 5/5
Winners
Ballon d’Or (Men’s)
Ousmane Dembélé (Paris Saint-Germain / France)
Ballon d’Or Féminin (Women’s)
Aitana Bonmatí (Barcelona / Spain)
Kopa Trophy (Best player under 21 – Men’s)
Lamine Yamal (Barcelona / Spain)
Best Young Women’s Player
Vicky López (Barcelona / Spain)
Yashin Trophy (Best Goalkeeper – Men’s)
Gianluigi Donnarumma (Paris Saint-Germain and Manchester City / Italy)
Best Women’s Goalkeeper
Hannah Hampton (England / Aston Villa and Chelsea)
Men’s Coach of the Year
Luis Enrique (Paris Saint-Germain)
Women’s Coach of the Year
Sarina Wiegman (England)
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
Why your domicile status is important
Your UK residence status is assessed using the statutory residence test. While your residence status – ie where you live - is assessed every year, your domicile status is assessed over your lifetime.
Your domicile of origin generally comes from your parents and if your parents were not married, then it is decided by your father. Your domicile is generally the country your father considered his permanent home when you were born.
UK residents who have their permanent home ("domicile") outside the UK may not have to pay UK tax on foreign income. For example, they do not pay tax on foreign income or gains if they are less than £2,000 in the tax year and do not transfer that gain to a UK bank account.
A UK-domiciled person, however, is liable for UK tax on their worldwide income and gains when they are resident in the UK.
The%20specs
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