Posted Date : 01 Apr 2010
Malaysian Rating Corporation Berhad (MARC) announced a consolidated profit before tax of RM6.63 million against group revenue of RM17.11 million for the financial year ended 31 December 2009 at its 14th Annual General Meeting today.
MARC’s Chairman, En Mohammad Abdullah, said that despite the unfavourable financial market conditions, MARC was able to post profitable results for the year under review although revenue and pre-tax profit were 14.5% and 30.6% lower respectively compared to the preceding year. The second half of 2009 saw a much improved position in the domestic economy, supported by the continuous flow of positive economic data abroad and domestically.
MARC is confident that a pick-up in bond issuance activity will be seen in 2010, with projected corporate bond issuances in the region of RM50 billion. The pick-up will be fuelled by increased public and private spending, and the more stable external macro environment. MARC is forecasting a GDP growth rate of 5.2% for 2010, which falls in line with Bank Negara Malaysia's forecast range for GDP growth of 4.5% to 5.5%. The economy is expected to benefit from stronger domestic activity and a recovery in external demand.
MARC completed 17 new issue credit ratings with a total rated value of RM18.69 billion in 2009. The breakdown by rating products is as follows: RM18.13 billion in Corporate Debt (14 issues, 10 issuers), RM0.45 billion in Structured Finance (2 issues, 1 issuer), and RM0.11 billion in Project Finance (1 issue, 1 issuer).
Notable new bond issues rated by MARC in 2009 include Sime Darby Berhad’s RM4.5 billion Islamic Medium Term Notes Programme, CIMB Islamic Bank Berhad’s RM2.0 billion Junior Sukuk Programme, IJM Corporation Berhad’s RM1.0 billion Commercial Papers/Medium Term Notes Programme and UMW Holdings Berhad’s RM800 million Islamic Commercial Papers/Medium Term Notes Programme. Islamic bonds including sukuk accounted for 67.0% of the MARC-rated new issuances in 2009.
The overwhelming majority of MARC-rated bonds in 2009 were stable with a rating stability of 87.9%, excluding withdrawn ratings. As expected in a challenging economic environment, corporate bond ratings displayed a trend of significantly more downgrades than upgrades with a 3.7 to 1 ratio of downgrades to upgrades, in line with global credit trends. The bulk of the downgrades emanated from distressed and vulnerable issuers in the non-investment grade rating bands (below BBB) which were affected by the weak business conditions.
MARC's strategic initiatives in 2010 will reflect a continued focus on strengthening its internal processes, enhancing its rating capabilities and improving its visibility to the investing community.
Roza Shahnaz Omar 03-2090 2214/ firstname.lastname@example.org;
Shanizar Ahmad Shahar 03-2090 2212/ email@example.com