Malaysia sukuk sales set to double in January

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ringgitPlanned sukuk sales in Malaysia for January 2014 are already double those completed in the same month of 2013 as companies seek to raise funds before US stimulus tapering drives up borrowing costs, Bloomberg reported.

Corporates announced a 5.6 billion ringgit ($1.7 billion) pipeline for Islamic bonds, compared with the 2.3 billion  ringgit total sold in the first 31 days of 2013. Yields are climbing on signs of a global economic recovery, with borrowing costs on Malaysia’s top-rated debt rising 34 basis points from last year’s low to 4.51 per cent, the highest since February 2012, a central bank index shows.

Tenaga Nasional Bhd., the state-owned power producer, and sovereign wealth fund Malaysia Development Bhd., plan to issue more than 5 billion ringgit combined in January as part of the government’s $444 billion construction programme. CIMB Group Holdings Bhd. and AmInvestment Bank Bhd. predict total Islamic bond offerings will increase about 33 per cent this year to 60 billion ringgit as more projects come on stream.

Issuance in the world’s biggest Islamic bond market dropped 49 per cent last year to 49 billion ringgit. Sales reached a record 95.8 billion ringgit in 2012, distorted by highway operator Plus Bhd.’s unprecedented offering that raised 31 billion ringgit.

Malaysia’s top-rated sukuk issuers may choose to tap the bond market because it’s cheaper than taking a loan.

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Reading Time: 1 minute

Planned sukuk sales in Malaysia for January 2014 are already double those completed in the same month of 2013 as companies seek to raise funds before US stimulus tapering drives up borrowing costs, Bloomberg reported.

Reading Time: 1 minute

ringgitPlanned sukuk sales in Malaysia for January 2014 are already double those completed in the same month of 2013 as companies seek to raise funds before US stimulus tapering drives up borrowing costs, Bloomberg reported.

Corporates announced a 5.6 billion ringgit ($1.7 billion) pipeline for Islamic bonds, compared with the 2.3 billion  ringgit total sold in the first 31 days of 2013. Yields are climbing on signs of a global economic recovery, with borrowing costs on Malaysia’s top-rated debt rising 34 basis points from last year’s low to 4.51 per cent, the highest since February 2012, a central bank index shows.

Tenaga Nasional Bhd., the state-owned power producer, and sovereign wealth fund Malaysia Development Bhd., plan to issue more than 5 billion ringgit combined in January as part of the government’s $444 billion construction programme. CIMB Group Holdings Bhd. and AmInvestment Bank Bhd. predict total Islamic bond offerings will increase about 33 per cent this year to 60 billion ringgit as more projects come on stream.

Issuance in the world’s biggest Islamic bond market dropped 49 per cent last year to 49 billion ringgit. Sales reached a record 95.8 billion ringgit in 2012, distorted by highway operator Plus Bhd.’s unprecedented offering that raised 31 billion ringgit.

Malaysia’s top-rated sukuk issuers may choose to tap the bond market because it’s cheaper than taking a loan.

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