MALAYSIAN CORPORATE BONDS, SUKUK ISSUANCE AT RM132.82 BLN IN 2019 - SC

KUALA LUMPUR, April 16  -- The Malaysian corporate bonds and sukuk market reported total issuances of RM132.82 billion in 2019, a 25.96 per cent increase from RM105.45 billion issued in 2018.

In the Securities Commission (SC) Annual Report 2019 released today, SC said it has received 77 lodgements under the Lodge and Launch (LOLA) Framework and one application for issuances of corporate bonds and sukuk in 2019, as compared to 57 lodgements and two applications received in the previous year.

“Ringgit-denominated corporate bonds and sukuk issues continued to form the majority of the proposals approved by/lodged with the SC with a total nominal value of RM164.27 billion, of which 57 per cent or RM93.64 billion were sukuk.

“There has been an overall increase in the maturity profile of ringgit-denominated corporate bonds and sukuk approved by/lodged with the SC in 2019.

“The number of ringgit-denominated corporate bonds and sukuk with tenures of eight to 15 years and above 15 years increased by 26.67 per cent and 57.69 per cent, respectively,” it said.

However, it said corporate bonds and sukuk with tenures of one to seven years decreased by 38.89 per cent.

In 2019, the SC said a total of 39 ratings were assigned by credit rating agencies to ringgit-denominated corporate bonds and sukuk issues approved by/lodged with the SC.

The number of unrated issues rose 19.44 per cent compared to the previous year, the SC said, adding that the mandatory rating requirement for corporate bonds and sukuk has been removed effective January 2017.

“There were seven foreign currency-denominated corporate bonds and sukuk lodged with the SC in 2019, comprising four sukuk by foreign issuers and three corporate bonds by Malaysian issuers,” it said.

On equity market, the SC said it received five equity applications last year, of which two applications were for initial public offerings (IPOs) and three were for transfer of listings.

“In 2019, the SC approved four IPOs for the Main Market with total funds approved to be raised from these IPOs estimated at RM460 million, with an aggregate market capitalisation of RM1.68 billion.

“There were 30 new listings for 2019 -- the highest since 2006. Of these 30 listings, four were on the Main Market, 11 were on the ACE Market and the remaining 15 were on the LEAP Market.

“The total amount of funds raised from these new listings in 2019 was approximately RM2.02 billion.

The SC also registered 25 equity prospectuses in 2019, comprising 13 prospectuses for IPO and 12 abridged prospectuses.

In 2019, the SC considered 81 applications under its Rules on Take-overs, Mergers and Compulsory Acquisitions, compared to 72 applications in 2018.

“A total of 22 offer documents were cleared by the SC in 2019 involving a total offer value of RM4.90 billion or an average of RM222.50 million per offer, which represented a decrease of RM2.42 billion against the previous year.

“Of the 22 offers, six were undertaken by way of schemes. The largest offer for the year was in relation to Lafarge Malaysia Bhd, a cement producer now known as Malayan Cement Bhd, at RM1.56 billion in offer value and constituting 32 per cent of the total offer value for 2019,” it said.

Additionally, the SC said there were 11 privatisation offers as compared to seven in 2018.

“However, MAA Group Bhd’s scheme failed to obtain the requisite approval from its shareholders while the offer for LTKM Bhd did not meet the acceptance condition,” it added.

-- BERNAMA