BIX ARTICLE
MARC expects Malaysia’s corporate bond, sukuk issuance to be around RM90b-RM100b this year
May 17, 2023
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Group chief executive officer Datuk Jamaludin Nasir said the rating agency expected the bond and sukuk capital market to be challenging this year after achieving an issuance totalling RM120 billion last year.
“Among these challenges include the economic conditions and global trends that can significantly impact capital markets,” he told reporters at Lead Managers League Tables award ceremony here on Tuesday (May 16).
He said the uncertainty regarding economic growth, inflation rates and geopolitical factors might also create volatility and affect investor sentiment.
“Changes in regulations also have a profound impact on capital markets,” he said.
He said the upcoming regulatory reforms or shifts in policies might also introduce new compliance requirements and alter the operating landscape for market participants.
Jamaludin said the rapid advancements in technology such as artificial intelligence, blockchain and digital currencies could disrupt traditional financial systems and market structures.
Therefore, he said adapting to these technological changes and leveraging them for efficiency and innovation would be essential.
However, Jamaludin said the corporate bond issuance is expected to continue as typically most of the issuance are projects based.
“Although we have a bit of lag for the first five months of the year, we hope that this will pick up the second half of this year based on the issuance applications in the pipeline.
“In comparison to the regional market, Malaysia’s bond market has always been more advanced and obviously a lot more competitive, whereby project sponsors will be able to achieve long-term financing project from our market,” he said.
On the impact of the rise in overnight policy rate, Jamaludin said MARC expected that there would be some pushback by some clients and there would be a lot of pressure on project-based issuance as it would increase the issuance cost.
He said historically, 75% of the investors in the Malaysian bond and sukuk market are largely locals with the balance being foreign investors.
“It was also observed that the rising rates by [the US] Federal Reserve have affected the capital. What we are seeing right now is that quite a number of the foreign investors are moving into fixed income and we are seeing slight growth in the market,” he said.
Nevertheless, he said the capital market had played a vital role in driving economic growth, attracting investments and ensuring financial stability in Malaysia by providing a platform for companies to raise funds, facilitate investment opportunities and contribute to the development of a robust financial system.
Meanwhile, in a statement, MARC said the annually published Lead Managers’ League Tables evaluated lead managers based on the volume and number of lead-arranged issuances rated by MARC Ratings in a specific year.
It said the 2022 Lead Managers’ League Tables saw Maybank Investment Bank Bhd emerged as the leader in the issue count league table of debt and sukuk programmes/issuances rated by MARC Ratings followed by CIMB Investment Bank Bhd while RHB Investment Bank Bhd and HSBC Amanah Malaysia Bhd secured the third place as joint winners.
In terms of issued value, it said CIMB Investment Bank claimed the top position with Maybank Investment Bank securing the second spot and RHB Investment Bank attaining the third position.
MARC said for notable corporates involved in deals rated by MARC Ratings, Projek Lebuhraya Usahasama Bhd (PLUS) was honoured with MARC’s Sukuk of the Year Award with its RM25.2 billion of Islamic Medium-Term Notes (MT) Programme being the world’s largest single rated sukuk issued by a corporate.
MIt said Amanat Lebuhraya Rakyat Bhd was the winner of MARC’s Innovative Deal of the Year Award for its highway trust model, being the first of its kind in Malaysia that is deemed a win-win deal for concession holders, the government and highway users over the long run.
It added that the Project Financing Award 2022 was awarded to TB Power Generation Sdn Bhd while MARC’s Sustainability Award 2022 was awarded to KPJ Healthcare Bhd’s Point Zone (M) Sdn Bhd for its overarching sustainability initiatives that aligned with the commitment to address gaps in the healthcare sector.
Disclaimer
The information provided in this report is of a general nature and has been prepared for information purposes only. It is not intended to constitute research or as advice for any investor. The information in this report is not and should not be construed or considered as an offer, recommendation or solicitation for investments. Investors are advised to make their own independent evaluation of the information contained in this report, consider their own individual investment objectives, financial situation and particular needs and should seek appropriate personalised financial advice from a qualified professional to suit individual circumstances and risk profile.
The information contained in this report is prepared from data believed to be correct and reliable at the time of issuance of this report. While every effort is made to ensure the information is up-to-date and correct, Bond and Sukuk Information Platform Sdn Bhd (“the Company”) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information contained in this report and accordingly, neither the Company nor any of its affiliates nor its related persons shall not be liable in any manner whatsoever for any consequences (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) of any reliance thereon or usage thereof.
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