Author Topic: Budget boosts exchange-traded bonds, sukuks  (Read 1246 times)

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Budget boosts exchange-traded bonds, sukuks
« on: October 26, 2012, 05:24:55 PM »
Wednesday October 3, 2012 The Star

KUALA LUMPUR: Bursa Malaysia expects the newly-introduced exchange-traded bonds and sukuks (ETBS) to rapidly gain momentum and attract foreign issuances out of Malaysia under Budget 2013.
 
Chief executive officer Datuk Tajuddin Atan said this followed the announcement by Prime Minister Datuk Seri Najib Tun Razak that the expenses incurred in the issuance of ETBS would get double deduction for four years.       
 
“The DanaInfra Nasional Bhd issuance of retail bonds worth RM300mil by year-end to finance the mass rapid transit development projects will spearhead the listing of ETBS on Bursa Malaysia.       
 
“We expect more investors to come on board. The first issuance will be the starting point for further growth,” he told reporters after launching the OSK Investment Challenge here yesterday.
 
He said the introduction of ETBS complemented the exchange’s goal to offer a diverse range of tradable products.
 
Tajuddin said that the announcement of the new business trust structure would add to the diversity of product offerings on Bursa and enhance businesses’ ability to obtain financial resources based on assets owned.       
 
“The listing of ETBS will provide 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 budget reiterated that Malaysia has an opportunity to be a key driver of the Asean marketplace.       
 
“As such, creating a regionally-competitive environment in Malaysia is paramount as both overseas multinationals operating here and Malaysian companies transitioning into multinationals needed a conducive environment to grow,” he said.
 
As capital flow barriers come down and Asean nations become more and more familiar with Malaysian investors, there is a need to be an internationally-competitive marketplace to ensure that the domestic investor base is maintained and the regional investor base continue to expand, according to Tajuddin.       
 
“As announced in the budget, retail investors will now also have access to a new range of investment products on Bursa to grow their wealth.
 
“For the first time, they will have the ability to trade both bonds and sukuks directly on Bursa,” Tajuddin said.
 
He also pointed out that the new exchange-traded asset class provided retail investors a more transparent and flexible method of investing directly in bonds and sukuks.
 
“In a nutshell, the budget resonates with Bursa’s strategic intention to transform the exchange into the leading marketplace in Asia,” he said. – Bernama
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