Bursa Malaysia seeks feedback on exchange traded debt (By IFN)

See: http://redmoney.newsweaver.co.uk/fvcceghlkm2h38rwoni3wx?email=true&a=6&p=23892725&t=21200155

MALAYSIA: Bursa Malaysia has published a consultation paper seeking feedback on a proposal for the listing and quotation for trading of Sukuk and conventional bonds issued by the Malaysian government, local and foreign corporations on the stock exchange.



“The introduction of the exchange traded bonds initiative is in line with one of Bursa Malaysia’s strategic priorities to offer a diverse range of tradable products on the exchange, and to elevate the bourse to be the leading market place in Asia,” said the exchange operator in a statement.

It also said that the project comes under the government’s National Key Economic Area initiatives; comprising measures aimed at developing the Malaysian economy to high-income status. “Aside from enhancing the diversity of products offered to investor, this initiative is also expected to attract a new segment of investors into the market and provide issuers with greater flexibility in their fundraising exercises,” it added.

The consultation paper is available on Bursa Malaysia’s website and will be available for comment until the 18th May this year.

While the exchange operator’s move may help develop the local Sukuk market, it remains questionable whether it will facilitate trading of Islamic bonds; in a market where secondary trading of Shariah compliant papers is notoriously thin.

Nonetheless, with Malaysia’s Sukuk market accounting for 73% of the total US$92 billion in new issuances last year, there is vast potential for an active market for Sukuk trading in the country; opening up room for further maturity in the local market and its attractiveness to foreign issuers.