KUALA LUMPUR: Rating Agency Malaysia Bhd (RAM) is bullish on the ringgit bond market this year amid an estimated gross domestic product expansion of 6%.
Executive deputy chairman Datuk Rajandram Chellappah said moving forward, the ringgit bond market should continue to chart growth this year.
He said RAM believed that gross issuance of private debt securities (excluding Cagamas bonds) would amount to RM35bil-RM40bil this year, in line with the stronger demand for debt-financing as private investment activities gained momentum.
“The banking sector is also another new area of focus,” he said, citing the rating of bank loans.
On RAM's newly-launched wholly-owned Sri Lankan-based unit, Lanka Rating Agency Ltd, Rajandram said the company was not expected to be profitable in the near term as it was a long-term investment.
“We expect the company to break even in the next year or so,” he said after the AGM yesterday.
Rajandram said the company was studying the possibilities of going into other overseas ventures.
“We have been invited to Pakistan and are currently evaluating the feasibility of this,” he said, adding that Bangladesh was also among the potential countries for market expansion.
On the Malaysian economy, RAM Consultancy Services Sdn Bhd managing director and chief economist Dr Yeah Kim Leng said he was bullish on the export sector despite the strengthening of the ringgit.
“There should be no immediate impact for exporters,” he said, adding that they should focus on increasing productivity and market penetration instead.
“Given Malaysia’s current strong fundamentals, we would be able to maintain a moderate performance this year,” Yeah added.
RAM recorded a pre-tax profit of RM9.01mil on revenue of RM27.9mil for the financial year ended Dec 31, 2005. It completed 102 new ratings last year, with a total proposed gross issuance value worth more than RM28bil.
As at end-2005, RAM had rated 988 PDS issues worth RM277.6bil in aggregate.
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