Malaysia has capacity to repay Panda Bonds — Rakuten

PETALING JAYA: Malaysia is not a bankrupt country and has the capability to pay back the Panda Bonds should the government agrees to issue them, said Rakuten Trade Sdn Bhd head of research Kenny Yee.

He said such borrowings, including the Samurai Bonds, would offer a multiplier effect to the Malaysian economy thus enabling it to grow and repay the loans.

“As long our economy is reviving (growing), certainly the capability is there. It shouldn’t be a problem. We don’t know the terms yet... (but) as long as the monies (from borrowings) are channelled correctly, I don’t see why we cannot pay off the loans,” he told media briefing on the 2019 market outlook yesterday.

Yee was responding to a question on whether Malaysia should accept the Panda Bond proposal made by a Chinese bank given its current high debt level. He expected the utilisation of the Panda Bond issuance would be more inclined towards the construction sector.

Recently, China’s ambassador to Malaysia Bai Tian said China Construction Bank had proposed to issue Panda Bonds in China for Malaysia to help ease the country’s financial stress.

Finance Minister Lim Guan Eng had said the proposal had been presented to him, and the prime minister and Cabinet were informed, but it was still in discussions.

On the other hand, Malaysia’s first 200 billion yen 10-year Samurai bond, guaranteed by the Japanese government, will be issued next month. — Bernama