Franklin Templeton remains upbeat on M'sian corporate credit, sukuk assets
Published on: Friday, December 19, 2014
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KUALA LUMPUR: Franklin Templeton Investments remained positive on the outlook for Malaysia's corporate credit and sukuk assets for next year.Its Executive Director/Head Malaysia Fixed Income and Sukuk, Hanifah Hashim, said the country's fundamentals remained strong and the government had shown its willingness to build a strong fiscal position by introducing unpopular measures to address the situation."Looking ahead, 2015 will be a challenging year for the fixed income market in Malaysia as improving economic growth in the United States, while it is good news, will eventually lead to a rise in the (US) interest rate, which could introduce some volatility in our local bond market," she said in a statement Thursday.
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However, Hanifah said while the macroeconomic condition in the US appeared to be strong, there were concerns on slowing growth in China, as well as flattish economic growth in Japan and the Eurozone. "That means, our market could see liquidity support from Japan, and to a lesser extent, the Eurozone as well," she said, adding that these combined factors would push and pull global growth as a whole in 2015.
In light of this, she said Franklin Templeton Investments believed that the interest rate in Malaysia would remain benign as the central bank would not want to risk the economic growth and fragile business and consumer sentiments by hiking interest rate too soon, given the weak oil prices currently. She said the retreat in global oil prices exacerbated the volatility in the Malaysian this month, affecting the local currency and resulted in the rise of 10-year Malaysian Government Securities (MGS) bond yield. - Bernama