Bursa Malaysia sees boost to exchange-traded bonds, sukuk

KUALA LUMPUR: Bursa Malaysia Bhd (Bursa Malaysia) expects the newly-introduced exchange-traded bonds and sukuks (ETBS) to rapidly gain momentum and attract foreign issuances out of Malaysia under 2013 Budget.

Its chief executive officer, Datuk Tajuddin Atan, said this followed the announcement by Prime Minister Datuk Seri Najib Tun Razak that the expenses incurred in the issuance of ETBS would get double deduction for four years.

“The DanaInfra Nasional Bhd issuance of retail bonds worth RM300 million by year-end to finance the mass rapid transit development projects will spearhead the listing of ETBS on Bursa Malaysia.

“We expect more investors to come on board.

“The first issuance will be the starting point for further growth,” he told reporters after launching the OSK Investment Challenge here yesterday.

He said the introduction of ETBS complementd the exchange’s goal to offer a diverse range of tradable products.

Tajuddin said the announcement of the new business trust structure would add to the diversity of product offerings on Bursa Malaysia and enhance businesses’ ability to obtain financial resources based on assets owned.

“The listing of ETBS will provide an additional, cost-effective method to raise capital as well as provide both domestic and foreign investors price transparency and flexible access to the stability of bonds and sukuks,” he said.

He said the Budget 2013 reiterated that Malaysia has an opportunity to be a key driver of the Asean marketplace.

“As such, creating a regionally-competitive environment in Malaysia is paramount as both overseas multinationals operating here and Malaysian companies transitioning into multinationals needed a conducive environment to grow,” he said.

Tajuddin said as capital flow barriers came down and Asean nations became more and more familiar with Malaysian investors, there was a need to be an internationally-competitive marketplace to ensure the domestic investor base was maintained and regional investor base continued to expand.

“As announced in the Budget, retail investors will now also have access to a new range of investment products on Bursa Malaysia to grow their wealth and for the first time, they will have the ability to trade both bonds and sukuks directly on Bursa Malaysia.

“This new exchange-traded asset class provides retail investors a more transparent and flexible method of investing directly in bonds and sukuks.

“In a nutshell, the recent announcements in the 2013 Budget resonate with Bursa Malaysia’s own strategic intention to transform the exchange to be the leading marketplace in Asia,” he said. — Bernama

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