Danajamin: M’sian bond market remains sound
KUALA LUMPUR: Malaysia’s bond market outlook remains sound this year, thanks to the positive investor confidence and ample domestic liquidity.
Danajamin Nasional Bhd chief executive officer, Mohamed Nazri Omar, said the expected launch of several infrastructure projects by the government this year would propel the local bond market.
“Whenever there are launches of projects, especially infrastructure projects, bond has always been the way to finance that,” he told Bernama on the sidelines of the Danajamin100 Batch 2 graduation ceremony yesterday.
Mohamed Nazri disclosed that the bond of a private financing initiative ( PFI) project that was approved by the government, which was also guaranteed by Danajamin, would be issued next month.
“There will also be one or two toll roads projects that had yet to be launched. These projects will definitely support the local bond market,” he said.
In addition, he said there are at least RM85 billion to RM90 billion worth of new bonds/sukuk being issued in the country every year.
“It shows how well- developed our bond market is in terms of breadth and depth,” he said, adding that Malaysia bond market had always been one of the most vibrant in Southeast Asia.
Commenting on the foreign bond sell- off valued at RM26.2 billion in March which was deemed the largest monthly sell- off since 2011, Mohamed Nazri said this was part and parcel of global economic investment.
“Whenever you have foreign ownership in bond or stock market, when the global economic climate changes, the sell- off phenomenon will occur,” he said.
However, he noted that the bond yield and local currency were hardly affected despite the foreign sell- off in March.
“I believe this was owing to the local liquidity which is good enough to take over. Which means that the demand is still there, and hence (the sell- off) did not affect the bond yield much,” he added.
He also believed that the Bandar Malaysia share deal cancellation would not have negative impact on the local bond market, as investor confidence still remained sound.
Since the inception in May 2009, Danajamin, Malaysia’s first and only financial guarantee insurer, has provided guarantee for RM8.8 billion worth of bond/sukuk programmes issued by 30 companies in various sectors in the country. It had brought about a market impact of RM15.2 billion through its risk- sharing collaboration with partner banks.
On Danajamin100, Mohamed Nazri said the programme, launched in 2014, aimed to develop and maximise students’ leadership abilities and potential through a variety of well- designed engagements in a three-year distinctive enrichment syllabus.
Today’s ceremony saw 30 students from five PINTAR schools in Perak, Penang and Kedah receive certificates of achievement and RM1,500 contribution in the form of SSPN-i after completing a three-year leadership course.