Market lauds bond liberalisation measures

by **Cals** Tue 10 Jun 2014, 03:15

Business & Markets 2014

Written by Bernama

Monday, 09 June 2014 14:52

KUALA LUMPUR (June 9): The liberalisation measures for bond market announced by Prime Minister Datuk Seri Najib Tun Razak today bode well for the country moving forward, said market players.
CIMB Group Holdings Bhd Group CEO Datuk Seri Nazir Razak said the measures would give more flexibility for companies to issue bonds at reduced cost and issuance period.

In his keynote address at Invest Malaysia 2014 today, Najib said the equity shareholdings for credit rating agencies would be liberalised, and international credit rating agencies with full foreign ownership would be allowed in the Malaysian market from Jan 1, 2017.

"Malaysian companies which are in those areas need to respond by also going international. You should also compete in another market," said Nazir.

Representing foreign fund managers, Gerald Ambrose, country head of Aberdeen Asset Management, said he was particularly delighted with Najib's announcement on further liberalisation to promote investment.

"We have been here since 2005. Although we are allowed to manage money for institutions for conventional funds, we could not approach the retail investors for unit trusts and we were only allowed to manage money for institutions like the government-linked companies.

"With the announcement, we are allowed to approach anybody and people can buy units from as low as RM1,000. That is what we have been asking for, so we are happy," he said.

AirAsia Group CEO Tan Sri Tony Fernandes said it was a good move for the government to scrap the mandatory requirements for credit ratings.

He said many companies would benefit from this new liberalisation, which would reduce business costs.

"It is up to the banks to feel if they are comfortable with their lending to the companies.

"Ultimately, lenders will come to evaluate a company's books, they will play out the risks and price the company accordingly," he said.