SC cautiously optimistic over possible increase in sukuk issuances

RAM Ratings said in line with the downward bias in global interest rates and the subsequent search for yields, domestic bond yields also retreated across the entire maturity spectrum and rating bands in June.

KUALA LUMPUR: The Securities Commission Malaysia (SC) is cautiously optimistic over a possible increase in sukuk  issuances this year.

Deputy chief executive officer Datuk Zainal Izlan Zainal Abidin said with there still being requirements in the market, there was the possibility of  sukuk issuances picking up over last year's level.

He said in the first quarter of this year, the market saw streams of applications for sukuk and hoped this would follow with issuances soon, but, with global conditions staying quite volatile, it was too early to say if it would surpass last year's figure.

“ There are quite a number of companies raising funds to finance the working capital of some of their projects. There are also some mega projects to be initiated soon and which would demand sukuk issuances.

“But, over the longer term, we have to see how the external economies pan out,” he told reporters on the sidelines of the SC- World Bank- IOSCO Asia Pacific Hub Conference 2019 here on MOnday.

Malaysia's government and corporate Sukuk issuances increased to RM199.90 billion in 2018, when compared to RM168.68 billion the year before.

Of this, RM72.68 billion was issued by the corporate sector, which was lower than 2017's sukuk issuance of RM87.65 billion.

On the request to make green financing cheaper, Zainal Izlan said the SC had already assembled a task force from the private and public sectors and would be submitting its recommendation to the Minister of Energy, Science, Technology, Environment and Climate Change in July this year.

“We are now looking into the entire ecosystem and the focus would be on the private sector's perspective in addressing the issue of financing for the green economy.

“We are looking into not only the convenience of the cost perspective, but also in terms of process, especially in the technical aspects,”  he added. - Bernama