US$1.5 billion sukuk makes Malaysia Islamic financial hub

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PUTRAJAYA: Malaysia’s successful pricing of the US$1.5 billion global sukuk has strengthened the country’s position as an international centre for Islamic finance, says Prime Minister Datuk Seri Najib Tun Razak.

Najib, who is also Finance Minister, said the 30-year tranche was the government’s inaugural sukuk issuance, which is the longest tenured sukuk ever by a sovereign.

“This sukuk also fulfils Malaysia’s objective of making the issuance a new benchmark,” he said at the Finance Ministry’s monthly gathering here yesterday.

The issuance comprises US$1 billion of 10-year and US$500 million of 30-year benchmark Trust Certificates (Sukuk) for a total size of US$1.5 billion.

Najib said the deal was oversubscribed, attracting an aggregate interest of US$9.0 billion from a combined investor base of over 450 accounts.

The 10-year tranche was oversubscribed nearly seven times while the 30-year tranche was oversubscribed about six times.

“The success of the transaction shows that international investor sentiment for Malaysia’s credit profile is very high and positive,” he said.

The premier also said the nation’s economy grew robustly in the first quarter of the year despite facing uncertain external challenges like the slump in global commodity prices and depreciation of the ringgit.

He said the Gross Domestic Product grew an encouraging 5.6 per cent, supported by a vibrant domestic economy despite weak external demand.

“In the same period, private investment at current prices rose 13.6 per cent to RM51.5 billion while total foreign direct investment (FDI) net inflows hit RM9.9 billion.

“This economic performance shows improved investor confidence in the country and reflects the effectiveness of the government’s management of the nation’s economy and finances,” he said.

Meanwhile, Najib called on all parties to come forward and help make the initiatives, taken under the Government Transformation Programme and Economic Transformation Programme, a resounding success.

He said the GTP and ETP reports, published recently, recorded various successful economic developments which were planned five years ago.

Among the success indicators were the increase in the per capita income of Malaysians to US$10,426 in 2014 from US$7,059 in 2009.

“The value of investments remained high, rising to RM228 billion in 2014 from RM142 billion in 2009, a historical feat indeed,” he added.

Najib said more than five million rural residents have benefited from basic amenities like the supply of electricity and clean water since the GTP and ETP were implemented.

Besides, more than 170,000 poor people have been lifted out of poverty as their incomes rose in the last five years.

This is our success, brought about by national policies which strongly support the country’s transformation policy,” he added. — Bernama