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Malaysia's bond
market still has room for expansion, said Minister in the Prime Minister's
Department Datuk Seri Effendi Norwawi. He said the growth was in relation to
corporate financing activities because commercial loans still accounted for
two-thirds of the funding needs of the corporate sector.
?There has been a healthy
level of financing in new investments, which constituted 66% of the total
private debt securities issued last year. Refinancing of existing debts
contributed 28% while the remaining 6% was accounted for by mergers and
acquisitions as well as restructuring,? he said in his special address at
RAM's League Awards 2007 yesterday. Effendi said since the financial crisis
in 1998, the volume of outstanding corporate bonds in the market had been
increasing at a compounded annual rate of 18.9% to RM186.1bil as at
end-2006. Between 1998 and 2006, bond issues accounted for 59% of the
country's total credit creation against 41% for commercial loans.
?Given the emphasis on private sector-led growth, the domestic bond market
will become even more important for the channeling of long-term savings to
finance private investments,? he said. Meanwhile, Rating Agency Malaysia Bhd
(RAM) chairman Tan Sri Dr Abdul Khalid Sahan said Malaysia?s bond market
would have a significant role to play in fuelling the country?s growth
amidst other emerging economies. He said the bond market was an essential
component of Malaysia?s financial landscape and would remain a vital
nation-building tool alongside the banking system and equity market.
?The domestic bond market has made great strides within a relatively short
span of time. Cumulatively speaking, as at March 31, 2007, RAM has rated
1,087 debt issues with a combined value of RM325.6bil.? A total 27 awards in
11 different categories were presented last night. CIMB Investment Bank Bhd
was named Malaysia?s top lead manager for 2006 after clinching the top spot
in RAM?s league table for the most number of deals and value of deals
closed. It bagged two Special Merit Awards for being top lead manager for
both corporate bond and corporate sukuk market in 2006. The Special Merit
Award is accorded to the top lead manager in the country based on the
institution?s achievements in the Malaysian debt capital market.
CIMB Investment also received two Blue Print Awards under the New Project
Finance Benchmark Deal for its RM9.17bil sukuk musyarakah and the Malaysia
Innovation of the Year for its RM3bil Islamic commercial papers/medium-term
notes programme and RM7bil Islamic medium-term notes programme. The Blue
Print Award is given for distinctive, groundbreaking bond/ sukuk deals in
recognition of the institution?s innovative and progressive thinking.
Alliance Investment Bank Bhd was presented the Special League Achievement
Award in recognition of its outstanding accomplishments in RAM?s league
table. HSBC Bank Malaysia Bhd won the Industry Recognition Award for its
outstanding contribution towards elevating Malaysia?s reputation in the
global financial market. Aseambankers Malaysia Bhd and AmInvestment Bank Bhd
collected four and two awards respectively.
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