Caga­mas plans to is­sue RM11b bonds and sukuk this year

New Straits Times - - Business - DATUK CHUNG CHEE LEONG

KUALA LUMPUR: Caga­mas Bhd, plans to is­sue a mix­ture of RM11 bil­lion worth of bonds and sukuk this year com­pared with RM5.7 bil­lion last year.

Chief ex­ec­u­tive of­fi­cer Datuk Chung Chee Leong said the higher pro­jec­tion was due to ex­pec­ta­tion of bet­ter de­mand from banks for the com­pany’s bond and sukuk to com­ply with the strin­gent Basel III re­quire­ments.

“One of the op­tion (for banks) is to look at Caga­mas in terms of pro­vid­ing them cap­i­tal man­age­ment as well as liq­uid­ity man­age­ment so­lu­tion,” he told re­porters dur­ing a brief­ing on the cap­i­tal mar­ket yes­ter­day.

As of last month, Caga­mas al­ready is­sued RM4.2 bil­lion in bonds and RM1.2 bil­lion in sukuk.

He said the global eco­nomic con­di­tion was more con­ducive for the lo­cal cap­i­tal mar­ket this year com­pared with last year.

“Last year, we had Brexit and the election in the United States which had ripple ef­fects added to the volatil­ity in the lo­cal mar­ket,” said Chung.

He said in terms of the pro­por­tion be­tween bond and sukuk, the com­pany planned to is­sue 70 per cent bond and 30 per cent sukuk.

“But the ac­tual ra­tio de­pends on the needs of the fi­nan­cial in­sti­tu­tions,” he said.

He said Caga­mas would is­sue bonds for non-Is­lamic loan fa­cil­ity, while sukuk would be is­sued for Is­lamic loans.

He added that the com­pany also did not set any tar­get ra­tio be­tween ring­git and non­ring­git de­nom­i­na­tion is­suance as it would de­pend on which cur­rency pro­vided the cheap­est op­tion at the time of the ex­er­cise.

Mean­while, on the de­vel­op­ment of the cap­i­tal mar­ket, he said more ed­u­ca­tional pro­grammes needed to be car­ried out in Malaysia to create aware­ness among re­tail in­vestors of the bond mar­ket’s ben­e­fits. Ber­nama

One of the op­tions (for banks) is to look at Caga­mas in terms of pro­vid­ing them cap­i­tal man­age­ment as well as liq­uid­ity man­age­ment so­lu­tion.

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