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EPICENTRE November 2021: Value-based Intermediation expanding coverage to real economic sectors
Newsletter
EPICENTRE November 2021: Value-based Intermediation expanding coverage to real economic sectors
Value-based Intermediation expanding coverage to real economic sectors
“Islamic finance and ESG investing share similar principles of being a good steward to society and the environment through prevention of harm and attainment of benefits. With many similarities, it is inspiring to see Islamic finance making significant headway and contributions in the ESG space in recent years.” - Governor Nor Shamsiah Mohd Yunus of Bank Negara Malaysia
[A quote from Euromoney's interview article "Malaysia brings Islamic finance and ESG together"]
The financial industry plays a critical role in supporting the sustainable business growth and lifelong cycle of production of real sectors to contribute directly to the Malaysian economy. In the pursuit towards embracing sustainability agenda, the Value-based Intermediation guidance documents are expanded to capture broader segment of industry in its value-based advocacy.
Recently, the VBI Financing and Impact Investment Framework (VBIAF) Sectoral Guide Working Group has released the second cohort of the VBIAF Sectoral Guides. These Sectoral Guides focusing on Oil & Gas, Manufacturing and Construction & Infrastructure, are a continuation to the series of guidance document for the financial industry to incorporate environmental, social and governance (ESG) risk considerations in their financing and investment decision making.
In order to ensure the effectiveness and practicality of these guiding documents, feedback from the general public is essential. For this reason, the Working Group invites the public to provide feedback on all three (3) guiding documents for the benefit of the industry as well as the nation as a whole.
The public feedback will be conducted for a period of three (3) months starting 7 October 2021 and all responses and feedback to be submitted by 7 January 2022 via the following link: https://forms.gle/Q2f5kJcM1B1eTLaNA
The public is also invited to attend a townhall session which will provide an insight to the Sectoral Guide documents and discussion platform for industry players and technical experts to share feedback. Register now!
Download the infographic below to get more information on the 2nd cohort of the VBIAF Sectoral Guides.
In addition, the Royal Award of Islamic Finance (The Royal Award) has released the final Royal Award Winner Commemorative Booklet featuring Shaikh Saleh Abdullah Kamel, the 2010 Royal Award recipient.
The Securities Commission Malaysia (SC) launched the third Capital Market Masterplan (CMP3), which will serve as a strategic framework for the growth of Malaysia’s capital market over the next five years.
As the world navigates beyond the pandemic, agility in thinking, approach and process is the way forward in dealing with the transformed future. This is where the Shariah community has to elevate itself, providing guidance that serves as the setting compass for institutions in charting new strategies and enabling the structuring of new innovative solutions.
The International Shariah Research Academy for Islamic Finance (ISRA), in partnership with Scotland-based Islamic Finance Council UK (UKIFC), has launched the final report in its 4-part thought leadership series designed to assist and encourage active engagement in support of the UN Sustainable Development Goals (SDGs) by the global Islamic finance sector.
Within the global sphere, the prospect of the halal economy is huge and this presents an excellent narrative with enormous prospects for Malaysia, given the forefront position in the global halal economy. Ranked top in both Islamic finance and Islamic economy, these trends open up opportunities to marry both of these segment.
Trade-based solutions can offer a viable option for businesses to ease liquidity constraints to rebound from the pandemic impact. Given the nature of the exposures, this warrants Islamic financial institutions (IFIs) to take an exploratory approach to new trade-based offerings and allows for a better understanding of the risks and their dynamics thus enabling IFIs to put in place the appropriate framework and policies.
In Asia, Malaysian Islamic financial entities garner the most media coverage and positive sentiment, according to Carma Asia Report. The analysis revealed the media gravitated towards strong focus of digitalisation effort and CSR activities by the banks.
The International Centre for Education in Islamic Finance (INCEIF) and Monash University signed an MoU to explore the pivotal role of Islamic finance in socio-economic recovery due to the pandemic.
Three Islamic banks namely Bank Muamalat, CIMB Islamic, and Bank Islam Malaysia Berhad, are stepping up their efforts to better serve the asnaf and B40 communities in facing the effects of the COVID-19 pandemic through the expansion of the iTEKAD programme ("iTEKAD 2.0").
Fitch Ratings expected that sukuk momentum to continue over the medium term supported by intact investor appetite, funding diversification and refinancing needs.
Malaysia is expected to continue to dominate global sukuk issuance with activity primarily denominated in local currency, according to a report by Moody’s Investors Service. Malaysia remains the largest contributor with issuances up by 15% at USD37.5 billion in the first half of 2021 (1H21) compared to 1H20.
The Malaysian halal industry is expected to contribute 8.1% to the country’s Gross Domestic Product (GDP) and generate RM56 billion export revenue in 2025 compared to RM30.6 billion in 2020, according to the 12th Malaysia Plan (12MP) document released by the Economic Planning Unit.
KPMG Malaysia has joined forces with the Islamic Banking and Finance Institute Malaysia (IBFIM) to drive sustainability and VBI initiatives for Malaysia’s financial services industry.
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