Corporate bond issuance swelled to RM124.2 billion in 2024, surpassing the previous year’s RM118.3 billion. The financial (RM51.7 billion) and real estate (RM19.9 billion) sectors continued to be the primary drivers of issuance, mirroring trends observed in 2023. RAM Ratings anticipate some of last year’s strength spilling over into 2025, seeing corporate bond issuance remaining healthy at RM110 billion-RM120 billion. Infrastructure financing and businesses’ funding needs should also support steady corporate bond issuance activity in 2025.
Gross issuance of MGS and GII moderated to RM176.7 billion in 2024, down from the high of RM190.9 billion in 2023. Looking ahead, RAM Ratings project MGS and GII issuance to ease further to RM155 bil-RM165 billion in 2025. This takes into account the government’s narrower deficit financing requirement in line with its commitment to fiscal consolidation, as well as more moderate needs in the refinancing of debts maturing this year.
The Malaysian bond market charted a more moderate foreign fund inflow of RM4.8 billion in 2024 (2023: inflow of RM23.6 billion), exacerbated by persistent bond market selloffs throughout most of the year amid heightened uncertainties over the US Federal Reserve’s (Fed) interest rate outlook and the view that rate cuts might not be as forthcoming as initially expected. While the selloff eased towards year-end, the Fed’s less dovish stance and recent downgrade of its rate cut expectations in the December dot-plot suggest the lack of a catalyst in spurring foreign investor demand in 2025.
