Issuance was 24 percent higher than in March at 11 billion ringgit (US$3.1 billion), according to figures compiled by Bloomberg. Sovereign wealth fund Khazanah Nasional Bhd. accounted for 2 billion ringgit and DanaInfra Nasional Bhd, a state-owned company that funds subway construction, raised 3.5 billion ringgit.
The ringgit closed down 0.1 percent at 3.5587 a dollar in Kuala Lumpur Wednesday. Interest Rates Most issuers aren’t in a hurry to sell because the chances of an interest-rate increase have diminished with the decline in oil prices cooling inflation, according to Manulife Asset Management Services Bhd., a unit of Canada’s biggest insurer. Consumer prices rose 0.9 percent in March from a year earlier, compared with the one-year average of 2.4 percent. The central bank kept its overnight policy rate at 3.25 percent for a fourth meeting last month. “The pipeline in Malaysia is a bit dry at the moment as there’s less pressure to lock in lower borrowing costs,” Elsie Tham, a senior fund manager at Kuala Lumpur-based Manulife Asset Management, which oversees more than US$1 billion, said in a phone interview Tuesday. “There are some big project financings being mentioned, but nothing has firmed up yet.” Supply Shortage Islamic debt sales in Malaysia fell 11 percent to 22.7 billion ringgit in 2015 while offerings of international notes that pay returns on assets to comply with the religion’s ban on interest climbed 16 percent to US$7.7 billion, data compiled by Bloomberg showed.
A supply shortage drove the Bloomberg-AIBIM Bursa Malaysia Corporate Sukuk Index, which tracks the most-traded local- currency notes, 1.8 percent higher to 110.45 this year as investors sought to park a record 625.2 billion ringgit of Islamic banking assets. The gauge reached a record 110.75 on April 21. “Conditions are conducive for companies to tap the market now as there’s little inflationary pressure,” Nik Mukharriz Muhammad, a Kuala Lumpur-based fixed-income analyst at CIMB Investment Bank Bhd., said by phone Tuesday. “The healthy economic growth and the rebound in crude oil prices also give issuers confidence to raise funds for expansion and for infrastructure development.”