Malaysia’s corporate bond issuance, which remained robust at RM104.6 billion (U$25.7 billion) in 2020 despite C19 and its lingering effects, is projected to reach RM100 billion-RM110 billion in 2021.
RAM Ratings, one of two key local rating agencies in Malaysia said the performance would be supported by the budding economic recovery – notwithstanding transitory setbacks – and financing for big-ticket infrastructure projects.
“Meanwhile, the Malaysian Government Securities and Malaysian Government Investment Issues issuance is projected at between RM155 billion (US$38.4 billion) and RM165 billion (US$40.9 billion) in 2021.
“This will be underscored by the government’s heftier deficit financing needs of RM69 billion (US$17.11 billion) for development expenditure that has been earmarked under Budget 2021, the highest on record,” it said in a statement today.
On 2020’s performance, RAM Ratings said the RM104.6 billion issuance exceeded its projections and was on par with the preceding year’s RM105.3 billion in terms of the net of adjustments. “Primary issuance was driven by backloaded financing in the second half of 2020 as issuers locked in cheaper funding following multiple rounds of monetary easing,” it said.
RAM Ratings said the Malaysian bond market clocked up an impressive net foreign inflow of RM18.3 billion (US$4.54 billion) last year compared to RM19.9 billion (US$4.93 billion) in 2019 despite investors’ flight to safety at the beginning of the year.
“The market saw an unbroken eight-month streak of foreign inflows to December 2020, lifting foreign participation to 13.9 per cent, its highest level since May 2018 underpinned by investors’ hunt for yield amid globally suppressed interest rates,” it added.