Malaysian Rating Corporation Berhad (MARC) held its 19th Annual General Meeting (AGM) at Sime Darby Convention Centre on 7 May 2015. At the meeting, the company announced its results for the financial year ended 31 December 2014. MARC Chairman, Datuk Azizan Haji Abd Rahman, informed shareholders that the company posted a consolidated pre-tax profit of RM5.4 million in 2014 (2013 : RM5.6 million) on the back of total revenue of RM16.5 million (2013 : RM15.7 million). At the meeting, shareholders also approved a first and final dividend payment of 15 sen per share (2013: 17.5 sen). 

 

“Total new gross corporate debt issuance came to around RM85.9 billion in 2014, which remained flat compared to the 2013 issuance at RM86.2 billion,” said Datuk Azizan.  He also added, “MARC had assigned ratings to new corporate debt and sukuk programmes worth RM44.1 billion in 2014 and had continued to maintain a significant voice in the domestic debt capital markets, with ratings on active outstanding issued debt papers amounting to approximately RM120 billion as at 31 December 2014.”

 

Datuk Azizan also commented on MARC’s satisfactory progress towards delivering its vision of becoming a provider of trusted insights on risk. The agency had been named the “ Best Islamic Rating Agency 2014” by Global Islamic Finance Awards (GIFA) in recognition of MARC’s contribution to the development of the Islamic finance market. “The award is a testament to MARC’s quality ratings coverage of sukuk and recognises MARC’s active role in the development and growth of Islamic finance and promoting governance at syariah-compliant institutions,” said Datuk Azizan.  

 

In his review of business and operations, MARC Chief Executive Officer, Mohd Razlan Mohamed, said, “Malaysia’s corporate debt market is expected to remain resilient with forecast gross newly rated private debt securities keeping in the range of RM50-60 billion in 2015.”  

 

“Of the RM44.1 billion new corporate debt and sukuk programmes rated in 2014 by MARC, RM13.2 billion were issued during the year. Sukuk once again formed the bulk of MARC’s assigned ratings, comprising approximately 75% of the total assigned value and about 70% of the total number of ratings assigned. As before, financial services and infrastructure & utilities remained major contributors to the total amount raised from the rated corporate bond segment. Issuances from banks also gained traction in 2014 on account of new issuances of Basel III-compliant Tier-2 bonds,” said Mohd Razlan. 

 

On the subject of rating transition, Mohd Razlan stated that only five rating changes – four downgrades and one default – were recorded in 2014, the lowest rating migration activity observed since 2002. The industrial product sector continued to experience rating downgrades as a result of challenging market conditions. 

 

MARC remains cautiously optimistic on the outlook for the corporate bond market as the current monetary policy stance is expected to continue to be supportive of new debt and sukuk issuances. The agency will also continue to promote the benefits of credit ratings to issuers and investors in managing risk, especially in the context of the volatile financial market and economic environment as well as the impending liberalisation of the domestic rating industry. MARC will continue to create new and compelling rating offerings to meet the demand for reliable, insightful and independent opinions from stakeholders. 

 

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