KUALA LUMPUR: The Securities Commission (SC) expects gross issuance of corporate bonds and sukuk to remain healthy with RM110 billion to RM120 billion to be raised in 2022.
This was conveyed by the SC executive chairman Datuk Seri Dr Awang Adek Hussin at MARC Malaysian Bond and Sukuk 2022 (MMBS 2022) virtual conference, which opened yesterday.
Awang Adek said the growth of this market segment would be underpinned by Malaysia's strong sovereign ratings, well-developed corporate bond structure, experienced market professionals and a conducive regulatory environment.
"The domestic bond and sukuk market has demonstrated its resilience in the face of past challenges and was a source of stability for Malaysia's broader financial system.
"Even during the pandemic, large defaults did not occur. In fact, gross issuance of corporate bonds and sukuk has steadily increased post-pandemic.
"Despite the current climate, I believe there are opportunities in the Malaysian bond and sukuk market," he said.
The MMBS 2022 is being held over two half-days on July 27-28.
Held annually, the conference is aimed at fostering dialogue among financial market professionals on developments in the bond and sukuk market amid the post-pandemic era.
In his welcoming remarks, Malaysian Rating Corporation Bhd (MARC) group chief executive officer Datuk Jamaludin Nasir said the rating agency expected to see more issuances in the Malaysian bond and sukuk market by the corporate sector and the government.
He said this would be underpinned by the country's transition into the endemic phase and heightened lending rates.
"Bank Negara Malaysia's decision to raise the Overnight Policy Rate in May is perceived as managing inflationary pressures, apart from being a defence against significant capital outflows and ringgit depreciation amid the higher interest rates in the US.
"This hawkish pivot implies Bank Negara's growing confidence in the domestic economy's near-term prospect.
"Nevertheless, we expect that the eventual normalisation of monetary policy will be gradual to ensure sustainable economic recovery," said Jamaludin.