Malaysia's Islamic bonds lure "agnostic" investors

A broader investor base is enabling domestic borrowers to price shariah-compliant notes tighter than conventional offerings, CIMB says.

Malaysia’s fast-growing Islamic bond market is luring investors that are less experienced with such structures, enabling domestic borrowers to price these shariah-compliant notes tighter than conventional offerings.  

Hedge funds and fixed-income funds are among those emerging as significant buyers of the Southeast Asian nation’s Islamic bonds, or sukuk, which have been traditionally bought by Muslim investors seeking assets that adhere to shariah law.

“Most Malaysian issuers will typically opt for sukuk issuances if the nature of business of the issuers allow them to do so,” said Thomas Meow, head of credit markets at CIMB to FinanceAsia. “Sukuk issuances are able to attract a...

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