Better prospects for Petronas as sukuk costs decline, petrol price up

Petronas could emerge with rival bids

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) is enjoying a twin boost as commodity prices rally and Islamic bond costs fall just as it considers borrowing.

The difference in yield between 10-year government sukuk and two-year securities shrank to a five-month low of 91 basis points last week from as high as 128 in early January, making longer-term financing attractive for issuers such as Petronas. That’s been helped by record foreign purchases of ringgit government bonds last month, a rally in the currency and a recovery in Brent crude.