Bond Selling??? What is bond???
What is bond? For sure it is not the James Bond the movie...
Then if Malaysia to sell bond then to whom? International? What security will support the bond? Syariah compliance?
Malaysia plans to sell RM90 billion worth of bonds this year, to fund the budget deficit and refinance maturing securities.
The new bond issuance for this year is considered flat, taking into account that the debt issuance in the previous year is estimated to have reached RM90.2 billion.
According to Malaysian Rating Corporation Bhd (MARC), the government's deficit target this year is RM43 billion and RM45.6 billion of Malaysian Government Securities (MGS)/Government Investment Issue (GII).
Meanwhile, RAM Holdings Bhd said the market for public debt looks promising for the coming year, given better investor sentiments on future growth potential as pointed out by the flattening MGS yield curve.
"We also expect private debt-financing activities to increase due to a quicker rollout of Economic Transformation Programme (ETP) projects this year as large, longer term investments kick off," said RAM.
It noted that last year's corporate bond market had been very robust in comparison with 2010. By programme value, the third quarter issuance already exceeded the full year of 2010.
"Given the underlying positive investor sentiments and greater rollout of ETP projects, we expect corporate bond issuance in 2012 to rival if not better that of 2011," it said.
RAM also noted that financial services, infrastructure and utilities sectors will continue to dominate the 2012 bond market, similar to the trend seen in 2011.
Other sectors expected to have a strong presence in the bond market include real estate, property, gas, energy and oil.
Question: What is a Bond?
Answer: A Bond is
simply an 'IOU' in which an investor agrees to loan money to a company
or government in exchange for a predetermined interest rate.
If a business wants to expand, one of its options is to borrow money
from individual investors, pension funds, or mutual funds. The company
issues bonds at various interest rates and sells them to the public.
Investors purchase them with the understanding that the company will pay
back their original principal (the amount the investor loaned to the
company) plus any interest that is due by a set date (this is called the
"maturity" date).Then if Malaysia to sell bond then to whom? International? What security will support the bond? Syariah compliance?
Jan 31, 2012 - HomeGuru.com.my
Malaysia plans to sell RM90 billion worth of bonds this year, to fund the budget deficit and refinance maturing securities.The new bond issuance for this year is considered flat, taking into account that the debt issuance in the previous year is estimated to have reached RM90.2 billion.
According to Malaysian Rating Corporation Bhd (MARC), the government's deficit target this year is RM43 billion and RM45.6 billion of Malaysian Government Securities (MGS)/Government Investment Issue (GII).
Meanwhile, RAM Holdings Bhd said the market for public debt looks promising for the coming year, given better investor sentiments on future growth potential as pointed out by the flattening MGS yield curve.
"We also expect private debt-financing activities to increase due to a quicker rollout of Economic Transformation Programme (ETP) projects this year as large, longer term investments kick off," said RAM.
It noted that last year's corporate bond market had been very robust in comparison with 2010. By programme value, the third quarter issuance already exceeded the full year of 2010.
"Given the underlying positive investor sentiments and greater rollout of ETP projects, we expect corporate bond issuance in 2012 to rival if not better that of 2011," it said.
RAM also noted that financial services, infrastructure and utilities sectors will continue to dominate the 2012 bond market, similar to the trend seen in 2011.
Other sectors expected to have a strong presence in the bond market include real estate, property, gas, energy and oil.
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