KUALA LUMPUR: The primary Malaysian corporate bond market remained muted in 3Q 2013, with gross issuance of corporate bonds declining 7% quarter-on-quarter to RM17.2bil, RAM Ratings said.
“Year-to-date, the value of gross private debt securities issuances reached RM61.7bil, down 35% from the corresponding period in 2012,” it added.
Issuers from the financial services sector were the most prolific, accounting for nearly 65% of total PDS issued up to end-September 2013. Notably during the quarter, CIMB Bank Bhd and Public Bank Bhd issued the first tranche of their respective RM10 billion Tier-2 Basel III-compliant subordinated bond programmes.
CIMB Investment Bank Berhad topped the RAM Lead Managers’ League Table for the period ended Sept 30, 2013, claiming pole position in both programme size and number of bond issues managed.
According to RAM Ratings, market sentiment in July and August 2013 continued to be affected by fears of a scale-back in the US quantitative easing (QE) programme, which led to a flight of capital from most emerging economies, including Malaysia.
Yield curves also steepened across the board during the period, the ratings agency said.
“Consequently, the bond market remained on the sidelines, with market participants adopting a cautious attitude and several potential issuers postponing their issuance plans,” it explained.
“However, yields started to ease slightly in September when the QE scale-back did not materialised; as such, bond issuance may pick up in 4Q 2013”
It added that it had published ratings for RM27.3bil of issuances by programme value, bringing the year-to-date value to RM48bil, marginally below that for the previous corresponding period.