Tuesday, February 8, 2011

RAM expects RM60b corporate bonds to be issued this year

KUALA LUMPUR: RAM Holdings Bhd expects up to RM60 billion of bonds to be issued in 2011 as private debt securities (or PDS) public-private partnership (PPP) programmes tap into private debt securities (PDS).

The ratings agency said on Tuesday, Feb 8 said the increase in corporate bonds this year would likely to rise following more commercial activities due to the multiple Entry Point Projects (EPPs), thus boosting demand for capital.

'The Malaysian bond market will also be propelled by resilient domestic demand, burgeoning intra-Asian exports as well as mergers and acquisitions as enterprises pursue their ambitions to expand and become high-performance businesses,' it said.

RAM Ratings said while demand was anticipated to remain encouraging for bond and sukuk issues amid ample global and domestic liquidity, it expected narrowing opportunities to raise funds at current rates.

'We anticipate interest rates to rise as domestic price levels increase. We expect the overnight policy rate to be lifted to 3.25%-3.50% by year-end, with the first 25-basis-point hike coming in during the second quarter,' it said.

For 2010, there were RM256.2 billion of outstanding issues, translating into a 6.4% growth for the year.

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