Malaysia has been pioneering the sustainable Islamic finance market well before the country’s 2014 launch of the Sustainable and Responsible investment (SRI) Sukuk framework. Zainal Izlan Zainal Abidin, Deputy Chief Executive of Malaysia’s Securities Commission, says the country needs to build on the seven SRI sukuk issued to date and pull more borrowers from the private sector into the sustainable finance market while ensuring demand from investors.
The sovereign issuer overcame a highly challenging political landscape, culminating in a political crisis, to secure a significant quantum of international funding to support its ailing economy.
The South East Asian sovereign returned to market with its second green sukuk issuance in 12 months. The dual tranche conventional/green sukuk issue saw USD7bn worth of orders from high quality accounts and tightened 30bp and 45bp inside the initial guidance.
The ASEAN economy opened up the 2019 EM sovereign bond season with an impressive USD1.5bn placement, but generous spending plans for the infrastructure push and a reshuffle atop the Central Bank risk blowing the Philippines’ deficit out of control – unless capital inflows catch up.
A default in September 2018 at infrastructure conglomerate and non-bank lender IL&FS cascaded across India’s financial sector in ways that are still being felt today, cutting off many non-bank financial companies – which account for more than a quarter of India’s domestic lending – from wholesale funding markets, and putting the brakes on the segment’s hitherto remarkable growth. Linking up with their conventional banking peers could help NBFCs address their structural dependence on wholesale funding and improve the quality of banks’ assets.
Whether in terms of trade, commerce, or cultural linkages, Gulf Co-operation Council (GCC) states have become increasingly diverse in their international ties over the past decade – with those linking the region to Asia emerging as one of the most critical corridors of economic activity. But how can GCC borrowers capitalise on emerging funding opportunities brought about by these deepening relationships?
Dato' Lee Kok Kwan, Chairman of BIX Malaysia, the Bond and Sukuk Information Exchange Malaysia, spoke with Bonds & Loans about the sukuk pipeline for the coming year, growing demand for Sharia-compliant instruments, and Malaysia’s innovative approach to Islamic finance.
The recent announcement that Chinese government bonds (CGBs) and policy bank bonds will be included in the Bloomberg Barclay’s Global Aggregate (Global Agg) Index marks a huge milestone in China’s gradual integration into global markets. Not only does index inclusion herald the beginning of an influx of foreign investment, but it has the potential to mould credit markets across the region.
With spreads on record volumes of bonds issued by China’s real estate developers widening to near 2009 levels and a softening of the Chinese economy taking hold, some analysts have raised alarm bells – even going so far as to question whether a bubble, which some allege to be brewing, or other big shock to the sector could catalyse the next financial crisis. There is, however, good reason to believe those fears are overblown.
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15 May 2019