Tenaga Nasional Bhd’s planned Islamic bond offering, the second-biggest in Malaysia this year, will push the nation’s annual ringgit sukuk sales to a record.
The state-owned power producer will start marketing RM4.85 billion of Syariah-compliant ringgit debt next week to fund the construction of a coal-fired power plant in the northern state of Perak, Kuala Lumpur-based Chief Executive Officer Che Khalib Mohamad Noh said in a Oct. 18 interview. Companies have sold RM35.3 billion of local- currency sukuk this year, compared with the high of RM38.7 billion in 2007, data compiled by Bloomberg show.
Spending programs by Asian governments to build railways, roads and ports may help support sales of Islamic bonds, as they are backed by assets, Standard & Poor’s said in an Oct. 17 report. Tenaga’s project is part of Malaysia’s 10-year $444 billion economic transformation program.
“The momentum for sukuk sales in Malaysia should be good going into next year, given the pipeline of projects under the plan,” Michael Lau, head of debt markets at Kuala Lumpur-based Maybank Investment Bank Bhd., said in an interview yesterday. “The current low interest-rate environment will also encourage companies to refinance their debts.”
Indicative yields on Malaysia’s benchmark five-year local- currency Islamic bonds have dropped more than a percentage point since June 2008 to 3.49 percent on Oct. 19, Bank Negara Malaysia data show. The Bloomberg-AIBIM-Bursa Malaysia Sovereign Shariah Index, which tracks the most-traded government debt, was at 105.0030, near the record high of 105.0880 reached on Sept. 13. The gauge has advanced 3.9 percent this year. -- Bloomberg
The state-owned power producer will start marketing RM4.85 billion of Syariah-compliant ringgit debt next week to fund the construction of a coal-fired power plant in the northern state of Perak, Kuala Lumpur-based Chief Executive Officer Che Khalib Mohamad Noh said in a Oct. 18 interview. Companies have sold RM35.3 billion of local- currency sukuk this year, compared with the high of RM38.7 billion in 2007, data compiled by Bloomberg show.
Spending programs by Asian governments to build railways, roads and ports may help support sales of Islamic bonds, as they are backed by assets, Standard & Poor’s said in an Oct. 17 report. Tenaga’s project is part of Malaysia’s 10-year $444 billion economic transformation program.
“The momentum for sukuk sales in Malaysia should be good going into next year, given the pipeline of projects under the plan,” Michael Lau, head of debt markets at Kuala Lumpur-based Maybank Investment Bank Bhd., said in an interview yesterday. “The current low interest-rate environment will also encourage companies to refinance their debts.”
Indicative yields on Malaysia’s benchmark five-year local- currency Islamic bonds have dropped more than a percentage point since June 2008 to 3.49 percent on Oct. 19, Bank Negara Malaysia data show. The Bloomberg-AIBIM-Bursa Malaysia Sovereign Shariah Index, which tracks the most-traded government debt, was at 105.0030, near the record high of 105.0880 reached on Sept. 13. The gauge has advanced 3.9 percent this year. -- Bloomberg
