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Posted Date : 29 Jan 2015

The domestic economy and capital market in general will face considerable headwinds in 2015 as a result of the current low crude oil price environment and the slowdown in economic growth of major trading partners like China. As announced earlier in the rating agency’s report entitled Economic Outlook 2015: Gyrations Amid Pockets of Silver Lining, Malaysia’s headline GDP is forecast to grow slower at 4.7% in 2015 with a downward bias. MARC’s forecast is within the range of Malaysia’s recently announced revised 2015 GDP growth forecast of 4.5% to 5.5%.

MARC expects gross newly-rated bonds/sukuk issuance volume to be in the range of RM50-60 billion in 2015. Together with newly-unrated government-guaranteed papers and unrated private placements of an expected RM30 billion, MARC forecasts a total of RM80-90 billion of new private debt securities issuances in 2015, almost unchanged from the RM85.9 billion recorded in 2014. MARC additionally foresees higher issuances from the unrated quasi-government segment to fund ongoing mega infrastructure-related projects initiated by the government, such as the construction of the Second Mass Rapid Transit (MRT) Line and the Light Rapid Transit (LRT) 3 Project. MARC is confident that infrastructure financing will hold up in the year ahead, given that there was no reduction in development expenditure in the government’s recent review of Budget 2015. 

In 2014, CIMB Investment Bank Berhad (CIMB) retained its pole position in MARC's 2014 Lead Managers’ League Tables for both categories of issue count and issue value. This marks CIMB’s third sequential year at the top of MARC’s issue value league table with a total issue value of RM4.83 billion rated by MARC in 2014. Bank Muamalat Malaysia Berhad came in second, followed closely by BNP Paribas Malaysia Berhad. In the issue count league table, CIMB topped the list with three issues, followed by AmInvestment Bank Berhad with two issues. In 2014, MARC assigned 13 new ratings on new corporate debt programmes worth RM44.1 billion, compared with 18 programme ratings worth RM36.7 billion in 2013. Sukuk programmes once again formed the lion’s share of MARC’s assigned ratings, comprising approximately 75% of the total assigned value and 70% of the total number of ratings assigned. 

Noteworthy new debt programmes rated by MARC and issued in 2014 included TNB Western Energy Berhad’s RM3.655 billion Islamic securities, Petronas Dagangan Berhad’s RM2.0 billion Sukuk Murabahah Islamic Commercial Papers and Islamic Medium Term Notes Programme, DRB-HICOM Berhad’s RM2.0 billion Perpetual Sukuk Musharakah Programme, WCT Holdings Berhad’s RM1.5 billion Sukuk Murabahah Programme and Northport (Malaysia) Bhd’s RM1.5 billion Sukuk Musharakah Programme. MARC had also announced the assignment of six new ratings on debt programmes totalling RM36.5 billion in 2014 which are pending issuance this year.  

Independent rating opinions reduce information asymmetry amongst investors and facilitate efficient allocation of capital. For long-gestation project finance transactions, rating agencies’ post-issuance surveillance ensures that there would be continuous monitoring of market and operational risks throughout the tenor of the financing. MARC is committed to build on its track record of providing credible credit opinions which spans nearly two decades, and is optimistic about the continued utility of credit ratings in the domestic debt capital markets in facilitating sound investment decision-making and pricing of credit risk premiums. Despite the removal of the mandatory rating requirement for tradeable bonds/sukuk from 2017 and the rising volume of unrated issuances during the last couple of years, MARC remains positive about the longer-term prospects for the credit rating industry.  

MARC CEO, Mohd Razlan Mohamed said, “credit ratings have their greatest value in an uncertain and volatile environment, thus, the need for independent and objective credit opinions will remain undiminished.”

Details of MARC’s 2014 League Tables are as follows:

LEAD MANAGERS’ LEAGUE TABLE FOR JANUARY-DECEMBER 2014
(by issue value in RM million) 

 

No.

Lead Manager

Conventional

Islamic

Total

1

2

3

4

5

6

7

8

9

CIMB Investment Bank Berhad

Bank Muamalat Malaysia Berhad

BNP Paribas Malaysia Berhad

RHB Investment Bank Berhad

HSBC Amanah Malaysia Berhad

Maybank Investment Bank Berhad

Affin Hwang Investment Bank Berhad

AmInvestment Bank Berhad

United Overseas Bank (Malaysia) Berhad

 

 

 

 

 

 

 

650.0

120.0

4,827.5

1,890.0

1,827.5

1,500.0

1,000.0

750.0

750.0

 

4,827.5

1,890.0

1,827.5

1,500.0

1,000.0

750.0

750.0

650.0

120.0

 

TOTAL

770.0

12,545.0

13,315.0

 

LEAD MANAGERS’ LEAGUE TABLE FOR JANUARY-DECEMBER 2014
(by issue count)

 

No.

Lead Manager

Conventional

Islamic

Total

1

2

3

4

5

6

7

8

9

CIMB Investment Bank Berhad

AmInvestment Bank Berhad

Bank Muamalat Malaysia Berhad

RHB Investment Bank Berhad

United Overseas Bank (Malaysia) Berhad

BNP Paribas Malaysia Berhad

Affin Hwang Investment Bank Berhad

HSBC Amanah Malaysia Berhad

Maybank Investment Bank Berhad

 

2

 

 

1

3

 

1

1

 

1

1

1

1

3

2

1

1

1

1

1

1

1

 

TOTAL

3

9

12

 

Note:
Issue value credit is given to Lead Managers based on the programme-specific arrangements between Lead Arrangers for jointly arranged programmes. Equal issue count credit is given to Lead Managers for jointly arranged programmes. 

The updated detailed criteria can be downloaded under :  Criteria for MARC Lead Managers for League Tables

Contacts:
Ahmad Feizal Sulaiman, +603 2082 2211 / feizal@marc.com.my
James Foo, +603-2082 2212/ james@marc.com.my