Thursday, November 3, 2011

RAM Ratings: Corporate bonds issuance at RM52.6b from Jan-Sept

KUALA LUMPUR (Nov 3):'' Corporate bond issuances rose to RM52.60 billion for the January-September period, of which the highest monthly issuance was RM13.30 billion of debt papers in August, according to RAM Rating Services Bhd.

'Going into the final quarter, we expect bond issuance to be on track towards achieving RAM Ratings' projection of RM60 billion for the full year,' it said on Thursday.

It said corporate bond issuance increased 13.3% quarter-on-quarter and 12.6% in the January-September period.

'In 3Q 2011, the bulk of the RM21.41 billion of offerings that came to the market comprised new issues from the financial-services and infrastructure sectors,' it said.

RAM Ratings said the sukuk market saw impressive growth. Sukuk issuance almost tripled year-to-date to RM42.10 billion, accounting for 73% of total bond issuance as at end-September 2011.

'Notably, the recent Budget 2012 announcements on tax deductions and income-tax exemptions are envisaged to encourage more sukuk issuance,' it said.

The rating agency said the market's appetite remained strong for highly rated papers; over 90% of the bonds issued as at end-September carried at least AA ratings.

'This trend is not expected to change given the uncertainties looming over the global economy and the slower growth projected for 2012. Cautious sentiment in the equity market has, however, translated into greater demand for bonds.

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