KUALA LUMPUR: A pick-up in infrastructure projects and capital-raising exercises by financial institutions will continue to drive the bond market for the rest of the year, says a rating agency.
RAM Ratings Services Bhd, in a statement yesterday, said it also expected the healthy amount of private debt securities (PDS) in the pipeline to support activities in the bond market.
The PDS pipeline encompassed new debt programmes which had not been issued, as well as those in various stages of being brought to the market.
In the first half of 2011, the Malaysian corporate bond market posted a robust 12.2 per cent, year-on-year, growth, underpinned by a surge in the value of new debt issuances.
Almost RM21.2 billion (or 67.9 per cent) of the RM31.2 billion bonds issued up to end-June 2011 came from new issuances.
For the same period last year, only RM6.4 billion (or 23.0 per cent) of total bonds issued were new issuances.
There was, in other words, a three-fold increase in the value of new issuances offered to investors in the first half of 2011, the rating agency said.
“The strong increase in total issuance shows that the bond market remains an attractive avenue for funding,” said the rating agency’s chief executive officer Chong Kwee Siong.
It said 57.5 per cent of the RM12.7 billion newly rated issues taken up by investors in the first half of 2011 were rated by RAM Ratings.
The bulk (63.0 per cent) of RAM-rated issues comprised sukuk, from issuers such as Sarawak Energy Bhd and Gulf Investment Corporation. — Bernama