‘CIMB IB top lead manager for bonds, sukuk’


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This article first appeared in The Edge Financial Daily, on October 20, 2016.

 

KUALA LUMPUR: CIMB Investment Bank Bhd (CIMB IB) came out tops on RAM Rating Services Bhd’s league tables for both corporate bonds and sukuk as at end-September 2016 after having arranged RM21.25 billion worth of RAM-rated corporate bonds and sukuk to date.

The amount represents over half or 56% of the RM37.88 billion RAM-rated corporate bonds and sukuk in the first nine months of the year (9M16), said RAM in a statement yesterday.

In terms of sukuk programme value alone, Maybank Investment Bank Bhd (Maybank IB), which has arranged RM12.54 billion or 72% of RAM-rated sukuk, takes the lead. Maybank IB is also joint leader with AmInvestment Bank Bhd and Hong Leong Investment Bank Bhd in terms of number of sukuk issues arranged, with four deals each.

As at end-September 2016, outstanding corporate bonds stood at RM536.5 billion, while the gross issuance of corporate bonds and sukuk — inclusive of quasi-government entities — amounted to RM66.4 billion in 9M16, almost 50% higher than last year’s January-to-September period.

“While the financial services sector remained the primary driver of corporate bond issuance — consistent with the trend of the last two years — other sectors such as infrastructure and utilities have also posted commendable issuance volume,” said the rating agency.

The financial services sector accounted for 43.4% of the gross issuance value in 9M16, while infrastructure issuance made up 26.6%.

“The largest contributors were Sarawak Hidro Sdn Bhd and Lebuhraya Duke Fasa 3 Sdn Bhd. Both entities fully issued their programmes at one go,” it said.

The financial services sector, it noted, recorded an issuance of RM2.5 billion for the same period, led by CIMB Bank Bhd (RM1.4 billion from its tier-2 subordinated debt programme of up to RM10 billion). The proceeds of that issuance will be used as working capital and for refinancing purposes.

RAM anticipates the corporate bond market to chart a steady course through the remainder of 2016.

Growth, it said, should be sustained by private financing initiatives for large-scale projects and further capital augmentation by financial institutions.

“Based on the existing pipeline, we expect gross corporate bond issuance to reach the higher end of our projected range of RM75 billion to RM85 billion for the year,” it added.