Malaysia, faced with overwhelming international demand for its latest Islamic bond (sukuk) offering, has increased the total from US$1 billion (RM3.26 billion) to $1.25 billion (RM4.07 bn). The Business Times describes this as a “thumping vote of confidence” and indeed it has only helped cement Malaysia’s image both as an emerging market powerhouse and a regional leader in Islamic/alternative investment.

Both signs are needed: At 3.87%, Malaysia’s is only the second bond offering from any ‘emerging’ market to yield below 4% in the past five years. Bonds, and especially sukuks, have taken a hammering recently amidst news of Greece’s debt misery, the freezing of Nakheel’s debt by Dubai World and four other Middle East sukuk issuers who defaulted in the past year. Malaysia’s leadership and success will hopefully reinvigorate the sector, which was already given a bump last month by the Qatar Islamic Bank’s announcement it plans to issue US$750 million in sukuk, its first such offering.

Middle Eastern investors represented 26% of the order amount. Malaysian investors took 18%, Other Asia 21%, Europe 20% and the US 15%.

source & article: Business Times