SINGAPORE: Malaysian Prime Minister Najib Razak said on Tuesday that Malaysia will likely tap global bond markets by offering a US dollar Islamic bond to test investor appetite for its assets.
“Most probably it will be in US dollars. There will be sukuk issues. An amount, we’ll announce that later,” Najib said at a dinner hosted by the Singapore Foreign Correspondents Association. Najib said Malaysia did not “actually need” the money, but “it is good for Malaysia” to find a benchmark on how the markets rate its credit worthiness. Islamic bond issues are regularly oversubscribed in Malaysia, the world’s largest sukuk market, because demand outstrips supply of sharia-compliant assets, and because long-term investors such as pension funds tend to hold them until maturity.
Islamic paper accounted for about a third of total Malaysian government bond issues of 88.5 billion ringgit ($27billion) last year, according to central bank data.
Source The News
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