MARKET DEVELOPMENT
Palm Oil Players To Issue Sukuk, Says Moody's Investors
Palm Oil Players To Issue Sukuk, Says Moody's Investors
26/03/2014 (Bernama) - Moody's Investors Service expects to see palm oil players to issue sukuk this year to tap the Malaysian market for funding.
It said this follows a trend of Asean agriculture companies, particularly Indonesian-based plantation companies, making cross-border debut sukuk issuances in Malaysia over the last two years.
"Malaysia has a deep and liquid domestic sukuk market, accounting for about two-thirds of the total global sukuk issuance in 2013, with a proven track record of supporting palm oil sukuk issuance.
"It's (Malaysia) sukuk investors are also familiar and comfortable with the palm oil industry, given that it is one of the country's key strategic priorities, and contributes about 10 per cent of the country's gross domestic product," Moody's said in a statement.
The research and rating provider also said government policy has provided further incentives for palm oil producers to issue sukuk.
In September 2013, the Malaysian government announced that agricultural-based sukuk issuances will enjoy a three-year double-tax deduction.
It said this follows a trend of Asean agriculture companies, particularly Indonesian-based plantation companies, making cross-border debut sukuk issuances in Malaysia over the last two years.
"Malaysia has a deep and liquid domestic sukuk market, accounting for about two-thirds of the total global sukuk issuance in 2013, with a proven track record of supporting palm oil sukuk issuance.
"It's (Malaysia) sukuk investors are also familiar and comfortable with the palm oil industry, given that it is one of the country's key strategic priorities, and contributes about 10 per cent of the country's gross domestic product," Moody's said in a statement.
The research and rating provider also said government policy has provided further incentives for palm oil producers to issue sukuk.
In September 2013, the Malaysian government announced that agricultural-based sukuk issuances will enjoy a three-year double-tax deduction.