IFAST SEES BOOST FOR RETAIL BONDS
SC’s new seasoning framework to encourage shift from fixed deposit market
IFAST Capital Sdn Bhd expects 20 per cent of Malaysia’s fixed deposit market value to shift to retail bonds in the next five to 10 years. The country’s fixed deposit market is estimated at RM470 billion currently.
iFAST managing director Dennis Tan said this would be on the back of the Securities Commission’s new bond seasoning framework.
Introduced in September last year, the new framework allows retail investors to access corporate
bonds and sukuk traded on over-the-counter market.
“The traditional bond market has long been dominated by sophisticated investors who have access to bonds at RM250,000 per odd lot. But even then, there is limited availability because standard lots for corporate and government bonds are traded at RM5 million and RM10 million, respectively.
“With the seasoning framework and what we are offering on our platforms, investors can now invest in investment-grade bonds from as low as RM1,000.
“Helped by a vibrant market, we expect 20 per cent of the RM470 billion fixed deposit market (value) in Malaysia to shift to retail bonds,” said Tan.
He was speaking after unveiling iFast’s online portal, FSMOne, here, yesterday.
The Malaysian bond market was worth RM1.4 trillion as of the third quarter of last year, with sukuk making up 60 per cent, or RM826 million.
Tan said as a first-market mover, iFAST had the potential to capitalise on the yet-untapped retail bond market despite the risk associated with it.
“iFAST will be the first player to make bonds truly accessible to retail investors with retail bonds being offered from as low as RM1,000 on FSMOne, formerly known as Fundsupermart.com.
“Of course, the risks are offset by the tremendous opportunity of shifting a sizeable amount of funds from retail investors in fixed income into bonds,” he added.
iFAST is fully-owned by Singapore-listed financial technology firm iFAST Corp Ltd.