Robust corporate bond issuance in 2020 despite pandemic

Published on 21 Jan 2021.

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Corporate bond issuance totalled RM104.6 bil in 2020 - an unexpectedly strong showing despite the disruptions of the coronavirus pandemic. Primary issuance was driven by backloaded financing in 2H 2020 as issuers locked in cheaper funding following multiple rounds of monetary easing. Total issuance exceeded RAM’s projections and was on par with the preceding year’s RM105.3 bil, net of adjustments.  

The Malaysian bond market clocked up an impressive net foreign inflow of RM18.3 bil in 2020 (2019: RM19.9 bil) despite investors’ flight to safety at the beginning of the year. The market saw an unbroken eight-month streak of foreign inflows to December 2020, lifting foreign participation (13.9%) to its highest level since May 2018. Much of this was underpinned by investors’ hunt for yield amid globally suppressed interest rates.

Looking ahead, we project some RM100 bil-RM110 bil of gross corporate bond issuance in 2021, supported by the budding economic recovery - notwithstanding transitory setbacks - and financing for big-ticket infrastructure projects. Meanwhile, MGS/GII issuance is projected at RM155 bil-RM165 bil in 2021. This will be underscored by the Government’s heftier deficit financing needs; RM69 bil of development expenditure has been earmarked under Budget 2021 - the highest on record.


Analytical contact
Woon Khai Jhek, CFA
(603) 3385 2512

Media contact
Padthma Subbiah
(603) 3385 2577


About RAM Rating Services Berhad (RAM Ratings)

Established in 1990, RAM Ratings is a leading credit rating agency registered under the Securities Commission’s Guidelines on Registration of Credit Rating Agencies, 2011. In addition to the provision of credit ratings for corporate bonds and sukuk and their issuers, RAM Ratings also provides research and publications on Islamic finance, fixed income and macro-economic and industry analysis as well as data analytics relating to credit risk, counterparty assessments and other related domains. 


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Publication Date Published Category
Bond Market Monthly - January 2021 21-Jan-2021 Bond Market Monthly View PDF