Gulf countries look to Malaysian sukuk market

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Malaysia’s established sukuk market and bank liquidity has perked the interest of Middle East institutions looking to issue debt into the Southeast Asian country.

According to a Reuters report, banks in the GCC countries are looking to Malaysian investors in order to diversify their sources of funding. The Saudi-owned and Bahrain-based Gulf International Bank said recently it set up a RM3.5 billion sukuk programme.

“The Malaysian ringgit market is increasingly an attractive alternative for Gulf entities looking to raise money,” Nick Stadtmiller, head of fixed income at Emirates NBD in Dubai, was quoted as saying. “Malaysian banks are highly liquid, and there is a developed set of other institutional buyers in the market.”

Malaysia’s ringgit bond and sukuk market is estimated to be worth US$300 billion with domestic issuers representing 95 per cent of market share. The sheer size of the sector in Malaysia is attracting foreign issuers.

The report said Abu Dhabi National Energy Co raised RM650 million from a 10-year sukuk at a profit rate of 4.65 per cent in February. Higher-than-expected demand prompted the company to increase issue size from an original RM500 million.

Last month, Abu Dhabi Commercial Bank issued a ringgit-denominated conventional bond worth US$101 million in its third ringgit foray in two years last month, carrying a coupon of 4.3 per cent, Reuters said.

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Reading Time: 1 minute

Malaysia’s established sukuk market and bank liquidity has perked the interest of Middle East institutions looking to issue debt into the Southeast Asian country.

Reading Time: 1 minute

Malaysia’s established sukuk market and bank liquidity has perked the interest of Middle East institutions looking to issue debt into the Southeast Asian country.

According to a Reuters report, banks in the GCC countries are looking to Malaysian investors in order to diversify their sources of funding. The Saudi-owned and Bahrain-based Gulf International Bank said recently it set up a RM3.5 billion sukuk programme.

“The Malaysian ringgit market is increasingly an attractive alternative for Gulf entities looking to raise money,” Nick Stadtmiller, head of fixed income at Emirates NBD in Dubai, was quoted as saying. “Malaysian banks are highly liquid, and there is a developed set of other institutional buyers in the market.”

Malaysia’s ringgit bond and sukuk market is estimated to be worth US$300 billion with domestic issuers representing 95 per cent of market share. The sheer size of the sector in Malaysia is attracting foreign issuers.

The report said Abu Dhabi National Energy Co raised RM650 million from a 10-year sukuk at a profit rate of 4.65 per cent in February. Higher-than-expected demand prompted the company to increase issue size from an original RM500 million.

Last month, Abu Dhabi Commercial Bank issued a ringgit-denominated conventional bond worth US$101 million in its third ringgit foray in two years last month, carrying a coupon of 4.3 per cent, Reuters said.

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