Malaysia’s total local currency bonds outstanding: RM1 trillion

Malaysia’s total local currency bonds outstanding stood at RM994bn (US$314bn) at 30 June 2013, the highest in the Asean region.

That’s a 6.4 per cent rise from last year though 0.2 per cent lower than the end-of-first quarter 2013.

A bond is paper issued by a borrower, whether the government, GLCs or private firms, with a promise to pay periodic interest payments over the period and to repay the face value at a maturity date. The terms of payment depend on how investors view the offer and the risk involved as well as the country’s economic climate – a view also shaped by rating agencies.

Out of this RM994bn bonds outstanding, the corporate sector accounts for RM406bn or US$128bn. Here are the top 30 outstanding corporate bonds in Malaysia. Note that four out of the top five issuers are state-owned.

Meanwhile, the central government accounts for RM459bn (US$145bn) or 77 per cent of the the total government bonds outstanding of RM588bn. This is a 10 per cent increase from the previous year. Moody’s Investors Service has an A3 rating for government bonds.

Banks and other financial institutions are the largest holders (42 per cent) of government debt at the end of the first quarter of 2013. Foreign investors hold 31 per cent of outstanding government bonds, while social security institutions like the EPF hold 20 per cent. The EPF also holds 10 per cent of corporate bonds.

When compared to the size of our economy, our bond market comes up to 105.3 per cent of GDP, still the highest in Asean and higher than Hong Kong’s or even China’s as a whole.

Source of tables: Asian Bond Monitor, September 2013, ADB Bank.

Meanwhile, Malaysia’s central bank has sold RM2.5bn of 30-year bonds, the longest-maturity offering ever but foreign investors have stayed away, the Wall Street Journal has reported. “One concern among investors has been Malaysia’s debt. The country had $145 billion of local-currency government bonds outstanding—one of the highest levels in the region—as of June 30, according to the Asian Development Bank. Indonesia has $89 billion of outstanding government bonds, Thailand has $104 billion and Vietnam has $26 billion.”

-anilnetto