Malaysian Bond & Sukuk Conference 2019: Capital Markets for a Sustainable Future
Market players and regulators expect the Malaysian bond market to remain resilient despite being reviewed by FTSE Russell’s World Government Bond Index (WGBI) due to market liquidity concerns. Bond issuances in Malaysia are expected to exceed RM100 billion in 2019, while the sukuk market is expected to remain resilient. How should market regulators, players and issuers respond to the current scenario to remain an attractive investment destination for investors, particularly from the international market. This event highlights the issues and strategies to remain resilient in an increasingly open and competitive market
At a Glance
DAY 1 - THURSDAY 28TH NOVEMBER 2019
8.00am : Registration and Welcome Refreshments 9.00am : Arrival of Guest-of-honour, (TBC, Malaysian Government) 9.05am-9.10am : Welcome Remarks by YBhg. Datuk Dr. Mohd Daud Bakar, Executive Chairman, Amanie Group 9.10am-9.20am : Welcome Remarks by (TBC, Securities Commission Malaysia) 9.20am-10.00am : Keynote Address by Guest-of-honour, (TBC, Malaysian Government)
Malaysia is among the emerging East Asian economies that saw the local currency bond market continue to expand over the first quarter of 2019 (Q1 2019), despite trade conflicts and moderating global growth. The outstanding amount of Malaysia’s local currency bonds totaled US$353.0 billion at end-March 2019, registering a 7.6 per cent year-on-year (y-o-y) growth from Q1 2018. Malaysia’s sukuk (Islamic bond) market remained the biggest in emerging East Asia, where 61.0 per cent of total local currency bonds outstanding, comprised sukuk. In Malaysia, 47.0 per cent of all government bonds are structured following Islamic principles, while 76.9 per cent of corporate bonds are sukuk.
The government has successfully issued its Samurai Bond with an oversubscription of more than 1.6 times at 324.7 billion yen against 200 billion yen offered. Malaysia is willing to consider issuing another Samurai bond if it can obtain rates similar to the 0.63 per cent per annum achieved in the earlier issuance of the 200 billion yen (approximately RM7.3 billion).
Initiatives of the Securities Commission of Malaysia (SC) resulted in the capital market expanding to RM3.19 trillion as at end April 2019. The capital formation was due to the ability of businesses to obtain long-dated financing through the equity, bond and sukuk markets. In 2019, Malaysia still maintains the global leadership for the Islamic capital market.
On 25 September 2015, the United Nations General Assembly adopted the 2030 Agenda for Sustainable Development, along with a new set of development goals that are collectively called the Sustainable Development Goals (SDGs). The Sustainable Development Goals (SDGs) recognize that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests. All policymakers have a big task ahead to create SDG roadmaps and strategies for success.
Retail bond is an important component of the overall bond and sukuk market infrastructure and the first of its kind to consolidate price and credit information. The platform will position Malaysia as a global benchmark for transparency and strengthens Malaysia’s position as a leading sukuk and bond hub in the region. The website provides an advance search engine allowing investors to filter the current RM1.3 trillion bond and sukuk in Malaysia according to their expected yield, duration and rating.
4.00pm-5.00pm : Session 3: Global Sukuk: A New Paradigm
In the years ahead, capital markets and investment banking are expected to see the increase of attention and development employing innovative technologies. Technology serves as a key driver of value migration in the capital markets industry. While speed, informational advantage, efficient customer flow, and effective use of proprietary capital have always been essential aspects of a profitable market-making business, the way these elements are implemented is changing dramatically.
The Fintech Capital Markets emphasize the core concepts of AI and examines the ways that AI could enhance and disrupt capital markets. Capital market players are well positioned to take advantage of the latest technological developments, and why capital markets are poised to be transformed by Artificial Intelligence (AI). However, until now, most firms have focused on using these technologies to cut costs, but AI has the potential to create value across the organization in many different ways.
Malaysia has been successful in developing the capital markets, particularly bond and sukuk markets. Now, it faces the challenge on how to improve and create a broader access and efficiencies of the bond and sukuk markets. The key factor such as high degree of investor concentration, dominated by government pension funds, may require the market to promote more diversity. Other challenges include, improving liquidity and transparency, technology and confidence level from both local and international capital market stakeholders.