Malaysia’s first retail ETBS expected to offer 3.7pc return
KUALA LUMPUR, Jan 8 – Malaysia’s first exchange-traded bonds and Sukuk (ETBS) launched today is expected to offer an annual return of about 3.7 per cent.
Chief operating officer of Danainfra Nasional Bhd Datuk Kamal Mohd Ali said they are confident that the retail sukuk will be able to offer a better return than fixed deposits.
He said the offer will be from Jan 8 until Jan 18 and the profit rate will be determined at the close of the book building of the institutional offering.
“We are optimistic that the retail sukuk will be able to offer about 3.7 per cent of return per annum,” he told reporters here today.
He added that the profit rate will be based on the demand and the prevailing market interest rate.
Earlier, Prime Minister Datuk Seri Najib Tun Razak launched the ETBS issuance, the first infrastructure bond issuance to be opened to the public.
Kamal said the retail sukuk’s coupon rate will be announced on Feb 8 following a book-building exercise.
“There was a total RM8 billion of issuance which we will issue on a quarterly basis depending on the requirements of the MRT project,” he said.
Chief Executive Officer of Bursa Malaysia Datuk Tajuddin Atan said the introduction of the ETBS complements the exchange’s goal to offer a diverse range of tradable products.
“This first issuance will be the starting point for further growth as it provides an additional, cost-effective method to raise capital as well as provide both domestic and foreign investors price transparency and flexible access to the stability of bonds and sukuks,” he said.
He said the ETBS launch is an Economic Transformation Programme (ETP)success story, providing a direct channel for Malaysians to share in the growth of the nation.
Danainfra is allocating RM300 milllion under this issuance, the initial tranche of the RM1.5 billlion for funding the first phase of the MRT Kajang to Sungai Buloh line.
The project is expected to generate a further RM8 billion to RM12 billion in Gross National Income (GNI) from spill-over effects. In total, an average of RM21 billion in GNI per annum will be generated over the next 10 years, creating 130,000 jobs, as well as pushing up the value of properties in the vicinity of MRT stations. – Bernama