CIMB sees improving bond environment

Written by Ellina Badri
Tuesday, 27 October 2009 12:07

PUTRAJAYA: Bond issuances managed by CIMB Investment Bank Bhd group are expected to reach RM50 billion this year, from RM40.5 billion currently, said CIMB Group chief executive Datuk Seri Nazir Razak.

He said CIMB’s transactions amounted to about RM48 billion last year, adding that its bond issuance pipeline could reach a record level next year, with an improved outlook for the bond market.

He also said Malaysia’s bond market had become a “national treasure” which market players must protect and preserve.

He was speaking to reporters here yesterday after signing the transaction agreements for Pengurusan Aset Air Bhd’s (PAAB) Islamic commercial papers and medium-term notes programmes of up to RM20 billion. CIMB Investment Bank is the lead arranger, manager and book runner for the sukuk.

“I’m a little bit concerned about the standard of transactions surrounding some of the recent issuances in the market. I urge market players and regulators to band together to protect this market, because when I go to other countries in the region, they all envy what we have here.

“A company like PAAB, which can get a programme together in no time, and lock in fixed rates for a long period of time, that is incredible. Some people tend to take that for granted,” Nazir said.

He said each bond issuance should be done in a transparent manner, with market players respecting the importance of preserving what had become the country’s most valuable asset.

“This also goes to borrowers and how they treat investors, and how they resolve outstanding amounts. It is very important to respect the law and standards of governance,” he added.

He said each issuer should ensure their processes were fully transparent, with every investor offered the opportunity to invest in issuances, and arrangers “driving the pricing down to the right level.”

He said some recent issuances had been, in his view, “slightly opaque”.

“Of course, there are cases of potential default, and it is good for the market to have these processed, but in doing so we must respect the fact that we all share this treasure, the bond market,” he said.

He said Malaysia was the only Southeast Asian country in which issuers could go to the market and get “20-year money just like that”.

“We’ve all built this bond market very methodically, with support from the National Bond Market Committee and the government. Let’s collectively preserve it,” he said.


This article appeared in The Edge Financial Daily, October 27, 2009.