KUALA LUMPUR: ''Moody's Investors Service has assigned a provisional foreign currency rating of (P) A3 to the securities under Malaysia's proposed US dollar-denominated sovereign sukuk.
In a statement Wednesday, June 22, Moody's said the payment obligations represented by the securities available on offer are pari passu with other senior, unsecured debt issuances of the government of Malaysia and thus justify a rating at the same level.
'Moody's expects to remove the provisional status of the rating upon the closing of the proposed issuance and a review of its final terms,' it said.
Moody's said the Malaysian economy has grown robustly during the recovery from the global financial crisis, supported notably by healthy private consumption and government stimulus.
In addition, the pickup in growth across the region and higher commodity prices have bolstered Malaysia's large export sector, it said.
'Yet inflation remains relatively low and such pressures are being kept in check by central bank policy actions.
'Despite headwinds from supply-chain disruptions from the March 2011 Japanese earthquake and from a moderation in Chinese demand, Malaysia's growth will continue to be supported in the near-term by domestic demand, particularly as investment spending accelerates under the government's Economic Transformation Programme,' it said.
Moody's said Malaysia's sovereign rating was anchored by the sustained strength in the country's strong external payments position, high savings rates, and deep onshore capital markets.
It said official foreign exchange reserves stood at US$32.7 billion, or more than four-times residual short-term external debt, as of end-May 2011.
In addition, the rating is supported by strong and well-managed corporate and banking sectors, which poses only marginal contingent liabilities to the government's balance sheet, it said.
However, it said that structural features of the Malaysia's fiscal framework may put pressures on the long-term sustainability of public finances.
'The government continues to be reliant on commodity revenues, while expenditure growth has been driven by a ballooning of the subsidy bill.
'Tax and subsidy reforms will be needed to better underpin Malaysia's sovereign credit fundamentals relative to its peers,' it said.
In a statement Wednesday, June 22, Moody's said the payment obligations represented by the securities available on offer are pari passu with other senior, unsecured debt issuances of the government of Malaysia and thus justify a rating at the same level.
'Moody's expects to remove the provisional status of the rating upon the closing of the proposed issuance and a review of its final terms,' it said.
Moody's said the Malaysian economy has grown robustly during the recovery from the global financial crisis, supported notably by healthy private consumption and government stimulus.
In addition, the pickup in growth across the region and higher commodity prices have bolstered Malaysia's large export sector, it said.
'Yet inflation remains relatively low and such pressures are being kept in check by central bank policy actions.
'Despite headwinds from supply-chain disruptions from the March 2011 Japanese earthquake and from a moderation in Chinese demand, Malaysia's growth will continue to be supported in the near-term by domestic demand, particularly as investment spending accelerates under the government's Economic Transformation Programme,' it said.
Moody's said Malaysia's sovereign rating was anchored by the sustained strength in the country's strong external payments position, high savings rates, and deep onshore capital markets.
It said official foreign exchange reserves stood at US$32.7 billion, or more than four-times residual short-term external debt, as of end-May 2011.
In addition, the rating is supported by strong and well-managed corporate and banking sectors, which poses only marginal contingent liabilities to the government's balance sheet, it said.
However, it said that structural features of the Malaysia's fiscal framework may put pressures on the long-term sustainability of public finances.
'The government continues to be reliant on commodity revenues, while expenditure growth has been driven by a ballooning of the subsidy bill.
'Tax and subsidy reforms will be needed to better underpin Malaysia's sovereign credit fundamentals relative to its peers,' it said.
No comments:
Post a Comment