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Malaysia corporate bond issuance falls in Q3
08 October 2013
Investor fears over end of QE hits region, says RAM Ratings
The Malaysian corporate bond market suffered in the third quarter as a result of rising investor wariness over emerging markets, according to analysis by Malaysian credit rating agency RAM Ratings.
The firm said gross issuance on the Malaysian corporate bond market fell 7% on a quarter-on-quarter basis to RM17.2bn ($5.4bn). It said investor fears over an end to the US quantitative easing (QE) programme affected most emerging markets, with Malaysia hit by flight of capital.
The agency said “the bond market remained on the sidelines”, and as a result, with the postponement of several issuances,
RAM said year-to-date issuances were over a third (35%) lower than in 2012, at RM48.0bn, down from RM61.7bn.
However, it said it remained optimistic that issuances may rise over the rest of the year, following the US Federal Reserve's re-commitment to QE and economic stimulus, which led to a slight easing of yields.
Over the quarter, RAM Ratings said issuance by financial services firms accounted for the majority (65%) of issuance, with CIMB Bank Bhd and Public Bank Bhd both issuing tranches of their Tier-2 Basel III compliant subordinated bond programmes.