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MALAYSIA:
After a four-year hiatus from the Islamic capital markets, Sabah Credit
Corporation (SCC) has returned with a RM1.5 billion (US$459.01 million)
Sukuk Musharakah program launched yesterday. The SCC is a financial
institution fully-owned by the Sabah state government and operates under
the purview of the Sabah State Ministry of Finance. The program is said
to provide an Islamic financing platform for the corporation to
opportunistically tap the robust liquidity available in the local capital
market.
The program comprises of a seven-year RM750 million (US$229.5 million)
Islamic commercial papers program and a 20-year RM1.5 billion (US$459.01
million) Islamic medium-term notes programme, which is subject to a
joint-limit of RM1.5 billion (US$459.01 million). According to a
joint-statement, the program affords SCC the flexibility to issue
short-term and long-term Sukuk from tenors of one month to up to 20
years. Proceeds from the issuance will be utilized to fund the
corporation’s Islamic financial business.
AmInvestment Bank acts as the sole principal advisor and lead arranger
for the Sukuk Musharakah Program. During the launch, Azman Hashim, the
group chairman of AmBank Group, conveyed that the program will further
strengthen Malaysia’s vibrant Islamic capital market and enhance the
country’s position as the leading Islamic financial centre globally. He
noted that Sukuk tranches from the new program will attract new
investors, thus boosting SCC’s existing diversified investor base from
both East and Peninsular Malaysia.
According to its annual report, SCC revealed its first financing product
in 2010, the ‘i-Executive Bai-Inah’ portfolio, which was aimed at
providing the public with a Shariah compliant financing facility. This
was funded by a RM1 billion (US$306.01 million) Sukuk program and other
Islamic financing facilities to reinforce SCC's funding base (refer to
Volume 7 Issue 48). For the financial year ended December 2013, SCC’s
pre-tax profit increased 22% year-on-year to RM68.8 million (US$21.05
million). Its return on assets and net financing margin improved to a
respective 3.6% and 5.4% respectively from 3.4% and 5.2% in the year
2012.
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