Danajamin partners CGIF to develop local capital market

KUALA LUMPUR: Danajamin Nasional Bhd has partnered the Credit Guarantee and Investment Facility (CGIF) to develop the local capital market in guaranteeing bonds and sukuk programmes. Danajamin Chief Executive Officer (CEO) Mohamed Nazri Omar said the partnership, aimed at facilitating meaningful exchange of market intelligence and talent development, would focus on capacity building and knowledge transfer.

"We will also jointly undertake transactions in the Malaysian capital market, joint guarantees and share the risks.

"We see a large potential of issuance next year and we are looking forward to tap into the market together," he told a press conference on the collaboration here, Tuesday.

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Danajamin, the country's first financial guarantee insurer, has a policy of single customer transaction of RM500 million per transaction.

To date, it has provided a guarantee for RM6.9 billion bonds and sukuk programme issues by 24 companies across all sectors and brought about a market impact of RM10 billion through its strategic collaboration with banks.

Meanwhile, CGIF CEO Kiyoshi Nishimura said considering the company is the Asian Development Bank's trust fund, its capacity of about US$2 billion would have to be allocated among countries in the region.

"Considering our limited capacity, this partnership is very important to us.

"In issuing bonds in the Malaysian market, we can do up to US$700 million, but to support local companies, we can do US$350 million," he said.

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He said the size of the Malaysia's local currency bond market is something that it should be proud of, given its impressive market depth, in terms of issuance size and tenure, proven by Plus Bhd's mammoth RM30 billion sukuk with 27 years tenure issued in 2012.

"Furthermore, measured in percentage of gross domestic product, the ringgit corporate bonds outstanding of more than 40 per cent is the largest in Asean," he added. –Bernama

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