Business

Wednesday October 7, 2009

Gradual pick-up in interest for bonds seen


PETALING JAYA: RAM Rating Services Bhd has observed a gradual pick-up in interest vis-à-vis the domestic bond market despite the lacklustre issuance of private debt securities (PDS) in the third quarter.

The firm said there had been markedly more rating enquiries in the last few months, complemented by sizeable rating mandates in the pipeline.

“It has been a year since the Malaysian bond market took a turn for the worse in the third quarter last year. Market participants have since adopted a wait-and-see stance amid the bleak global landscape, dents in investor confidence and pricing hurdles,” it said in a statement.

It said the lack of market activity in the first nine months was evident from the total rated value of RM33.2bil, compared with the previous corresponding period’s more robust RM53bil.

“In the first nine months, the value of new PDS rated by RAM amounted to RM24.6bil, translating into about 74% share of the market; of this, only RM7.7bil had been issued as at end of September,” it said.

The firm said sukuk market was more active in the first nine months with an aggregate rated value of RM17bil, i.e. some 14% higher year-on-year.

“We note that this market segment had been boosted by a RM10bil sukuk programme. As at the end of September, RAM had two new sukuk issuers that had collectively issued RM2.6bil of Islamic securities out of their total programme value of RM11.5bil,” it said.

The issuers were Danga Capital Bhd and Seafield Capital Bhd.

RAM’s portfolio of new PDS issuers in the first nine months was underpinned by financial institutions. The firm published the ratings of three new debt issues from financial institutions valued at RM2.6bil in the third quarter. In contrast, the ratings of six new debt facilities valued at RM18.9bil in total had been published in the second quarter.

For the first nine months, CIMB Investment Bank Bhd maintained its top spot on RAM’s League Table vis-à-vis the overall corporate bond market, with a 35% share in terms of programme value (see table).

AmInvestment Bank Bhd came in second ahead of RHB Investment Bank Bhd.

CIMB also retained its pole position in RAM’s League Table for sukuk issues, with a programme value of RM6.5bil or a 57% share.


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