KUALA LUMPUR: RAM Ratings Services Bhd expects gross corporate bonds issuance to rise to between RM100bil and RM110bil this year to finance the economic recovery and also for big-ticket infrastructure projects.
It said in a statement on Thursday it also expected Malaysian Government Securities (MGS) and Government Investment Issues (GII) issuance to be at RM155bi to RM165bil in 2021.
“This will be underscored by the government’s heftier deficit financing needs; RM69bil of development expenditure has been earmarked under Budget 2021 -the highest on record, ” it said.
Last year, RAM said corporate bond issuance totalled RM104.6bil, which was an unexpectedly strong showing despite the disruptions of the Covid-19 pandemic.
“Primary issuance was driven by backloaded financing in 2H 2020 as issuers locked in cheaper funding following multiple rounds of monetary easing, ” it said.
Total issuance exceeded RAM’s projections and was on par with the preceding year’s RM105.3bil, net of adjustments.
RAM said the Malaysian bond market recorded an impressive net foreign inflow of RM18.3bil in 2020 (2019: RM19.9bil) despite investors’ flight to safety at the beginning of the year.
“The market saw an unbroken eight-month streak of foreign inflows to December 2020, lifting foreign participation (13.9%) to its highest level since May2018.
“Much of this was underpinned by investors’ hunt for yield amid globally suppressed interest rates, ” it said.