SC Annual Report 2020: Fewer corporate bonds and sukuk issuances in 2020

SC Annual Report 2020: Fewer corporate bonds and sukuk issuances in 2020
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KUALA LUMPUR (March 18): The Malaysian corporate bonds and sukuk market saw total issuances drop by 21.26% to  RM104.58 billion last year compared with RM132.82 billion in 2019.

In its 2020 annual report released today, the Securities Commission Malaysia (SC) said it received 64 lodgements under the Lodge and Launch Framework for issuances of corporate bonds and sukuk in 2020 compared with 77 lodgements in the previous year.

Ringgit-denominated corporate bonds and sukuk issues continued to form the majority of the proposals lodged with the SC with a total nominal value of RM124.79 billion, of which 79.33% or RM99 billion were sukuk.

The regulator also noted that there has been an overall decline in the maturity profile of ringgit-denominated corporate bonds and sukuk lodged with it last year.

“The number of ringgit-denominated corporate bonds and sukuk with tenures of one to seven years and eight to 15 years has decreased by 9.09% and 52.63% respectively,” it said. “However, ringgit-denominated corporate bonds and sukuk with tenures of above 15 years have remained the same.”

There were four foreign currency-denominated corporate bonds and sukuk lodged with the SC in 2020, comprising two corporate bonds and two sukuk.

Equity

The stock market saw 19 new listings last year, of which two were on the Main Market, 10 were on the ACE Market and the remaining seven were on the LEAP Market, bringing a total market capitalisation of RM11.9 billion. The total amount of funds raised from these new listings in 2020 was approximately RM2 billion.

The SC said it received nine equity applications last year, up from five applications in 2019. Out of the nine applications, three were for initial public offerings (IPOs) — which included a proposed secondary listing on the Main Market, one was in relation to a proposed acquisition resulting in a significant change of business direction or policy and five were for transfer of listings to the Main Market.

“Despite the unprecedented challenges faced due to the Covid-19 pandemic, the Malaysian capital market saw the entrance of Mr D.I.Y Group (M) Bhd, a retailer with a market capitalisation of RM10.04 billion and a total of RM1.51 billion raised. Mr DIY’s market capitalisation is the largest since the listing of Lotte Chemical Titan Holding Bhd on the Main Market in 2017,” it added.

The SC also registered 38 equity prospectuses last year, comprising 11 prospectuses for IPO and 27 abridged prospectuses.

Read more stories from the SC Annual Report 2020 here.

Kang Siew Li