Malaysian Rating Corporation Berhad (MARC) convened the MARC Malaysian Bond & Sukuk Conference 2025 (MMBS 2025) last Friday via Zoom, serving as a platform for in-depth dialogue on how global trade realignment and digital innovation are driving new frontiers in economic and financial transformation.
Held under the theme “From Tariffs to Tech: Powering Growth in a Transforming World”, this year’s conference — supported by Moody’s Ratings as Event Partner — examined how global shifts in policy, technology, and sustainability are reshaping Malaysia’s financial markets and investment landscape.
In his opening address, MARC Group Chief Executive Officer Arshad Mohamed Ismail said the bond and sukuk market plays a pivotal role as a catalyst for transformation. “At MARC, we believe that the bond and sukuk market does not merely enable financing — it is an enabler of transformation,” he said. “It connects opportunity with capital, ambition with sustainability, and innovation with real-world impact.”
Arshad expressed appreciation to Moody’s Ratings for its continued collaboration and support, describing the partnership as a reflection of their shared commitment to strengthening thought leadership and market confidence within Malaysia’s bond and sukuk ecosystem.
He also announced a significant milestone for MARC — the release of Malaysia’s first Data Centre Rating Methodology Paper, a pioneering initiative that positions MARC at the forefront of evaluating and facilitating investments in the country’s expanding digital infrastructure sector.
Citing Bank Negara Malaysia’s gross domestic product (GDP) growth projection of between 4.0% and 4.8% in 2025, Arshad highlighted the nation’s economic resilience amid global shifts. He noted that Malaysia’s data centre market, valued at USD4.04 billion in 2024, is projected to reach USD13.57 billion by 2030, growing at an annual rate of 22%. However, he cautioned that rapid expansion must be balanced with sustainability considerations, as data centre power demand could exceed 5,000MW by 2035 — nearly 40% of Peninsular Malaysia’s current capacity.
“Green energy integration, grid modernisation, and ESG-aligned financing are no longer optional — they are essential,” Arshad said. “Malaysia has the talent, infrastructure, and market depth to be a regional leader — not just in Islamic finance, but in sustainable and digital finance as well. At MARC, we stand ready to play our part in building a resilient, technology-enabled, and sustainable future.”
China’s Economic Navigation Amid US Tariffs
The conference opened with a keynote presentation by Christine Zhang, Managing Director of China Chengxin International Credit Rating Co., Ltd. (CCXI), one of China’s largest credit rating agencies.
In her presentation titled “China’s Economic Performance amid US Tariff Shocks”, Zhang highlighted that China’s economy has remained remarkably resilient despite ongoing trade tensions and domestic structural adjustments. She noted that China’s GDP grew 5.2% y-o-y in the first three quarters of 2025, outperforming major economies amid a volatile global trade environment.
Industrial production and high-tech manufacturing have maintained growth above 9%, supported by strong investment in innovation and technology localisation. While property investment has weakened, equipment and tool investment rose 14% y-o-y between January and September, reflecting renewed industrial confidence.
Exports also held firm, growing 6.1% from January to September 2025, with mechanical and electrical products continuing to lead performance. Zhang noted that the share of US exports in China’s trade mix continues to decline, as China deepens cooperation with ASEAN economies and its Belt and Road Initiative partners.
She added that progress in US–China tariff negotiations and strengthened regional collaboration have helped stabilise expectations and support growth. “China is taking coordinated and rational actions to address tariff shocks while deepening multilateral cooperation to strengthen economic resilience,” Zhang said. “Closer ties with ASEAN and increased innovation investment will continue to drive long-term stability.”
Panel Discussion: Setting Up the Foundations for Digital Infrastructure and Data Centres
Following Zhang’s presentation, the conference featured a panel discussion titled “Setting Up the Foundations for Digital Infrastructure and Data Centres”.
The session was moderated by Elsie Tham, Head of Fixed Income at Manulife Investment Management (M) Berhad, and featured panellists Nidhi Dhruv, Vice President – Senior Credit Officer at Moody’s Ratings; Tan Tze Meng, Subject Matter Expert in Digital Infrastructure at Malaysia Digital Economy Corporation (MDEC); and Yazmin Abdul Aziz, Portfolio Head (Structured Finance, Property & Retail) at MARC Ratings Berhad.
The panel explored Malaysia’s readiness to attract large-scale digital infrastructure investments, highlighting the importance of sustainable financing, energy efficiency, and regulatory alignment. The discussion underscored that Malaysia’s bond and sukuk markets are well-positioned to support long-term capital needs for data centre and connectivity expansion, particularly through ESG-linked instruments.
The discussion also looked at the regulatory aspect of the data centre industry. Tze Meng noted, “What we found to be the key to opening up Malaysia to investments is the need for trust in the Malaysian ecosystem. What we did in the next 10 years was to engage with the industry and the government, and ensure that both sides understood each other and build that trust. The moratorium in Singapore also encouraged people to look at Malaysia more seriously. As a result, this gave us a lower risk profile.”
Tze Meng added, “One of the things that we have done is the formation of a data centre task force. This is a multi-agency, multi-stakeholder task force that looks into every aspect of the data centre industry and ecosystem. By having a unified task force, everyone can work together in the same direction. That was one of the key things that worked very well because we didn’t have a central agency that handles data centres. This centralised decision-making helped a lot.”
On ESG and sustainability, Nidhi observed data centre power consumption will outpace any development of renewables or even nuclear power in the region. “We are expecting, over the next five years at least, that data centres will continue to rely more on fossil fuels. While there are net zero targets to be achieved, the need for having onshore data security and data localisation will be favoured compared to the use of renewable energy,” she said. “While regulations for power and water use may pose potential hurdles for the speed of data centre growth, these requirements are ultimately necessary and will push the sector to become more efficient and innovative in designing these data centres,” she added.
Touching on MARC Ratings’ recently issued methodology for rating data centres, Yazmin elaborated on how regulatory and government policies influence the assessment of data centres. “These policies are central to our assessment as they set the foundation for long-term stability of the industry. For the data centre sector in Malaysia, given its infancy stage, we are closely following the latest developments on any new policies, in terms of policy clarity, predictability and alignment with the long-term national digital goals. Malaysia’s government has been very supportive and proactive in coming up with guidelines and plans, and this demonstrates their drive towards strong policy consistency in the future for this industry.”
In terms of the readiness of the bond market to invest in digital infrastructure and data centres, Yazmin said that most of the current deals have been done privately, but the bond market is getting increasingly ready. “There has not yet been any public issuance that is directly linked to a data centre but everyone is setting the building blocks for entry into the public market. We are seeing how best the capital market can facilitate these data centre investments. No doubt, investor appetite is there, but being in the infancy stage, one of the biggest issues that would need to be addressed is familiarity of the market and data transparency on the sector. Consistency and synchronisation of data is not there yet; from a credit rating agency’s point of view, hopefully as the sector matures, with more rated transactions, information will be available more publicly.”
Asia’s Economic and Market Outlook
The conference concluded with a presentation titled “Asia’s Economic & Market Outlook: Beyond the Geoeconomic Storm”, by Dr Ray Choy, Chief Economist at MARC Ratings Berhad.
Dr Ray noted that the ASEAN-5’s share of global GDP rose to 3.0% in 2024 from 1.8% in 2004, reflecting the region’s growing significance. While the US dollar continues to dominate global trade and finance, he said many central banks are pursuing gradual diversification to enhance monetary resilience.
He added that tariff de-escalation and easing geopolitical tensions across the ASEAN+3 region have strengthened trade flows and supply chain resilience, with average tariffs declining by 11% between August and October 2025. For Malaysia, growth is expected to remain solid at 4.3% in 2026, supported by robust electrical and electronic exports, higher private investment, and strong gross fixed capital formation.
Dr Ray also highlighted that global monetary easing is likely to continue through 2026, with the Federal Reserve rate cuts narrowing the yield spreads between US Treasuries and Malaysian Government Securities. This trend, along with ongoing reforms, has supported the ringgit’s strong performance in 2025.
The discussions throughout MMBS 2025 reflected a shared recognition that global transformation — driven by trade realignment, digital acceleration, and sustainability imperatives — demands both resilience and innovation.
As Malaysia navigates this rapidly evolving landscape, the bond and sukuk market will continue to play a vital role in connecting capital to purpose — financing the infrastructure, technology, and sustainable initiatives that underpin the nation’s next phase of growth.