NEW YORK: Investors are responding positively to Malaysia's sovereign bond offering
as the global bond roadshow, led by First Finance Minister Tun Daim Zainuddin, reaches
its final leg here.
Wilma Davis, Second Vice President of John Haneock Mutual Life Insurance Company
in Boston, Who attended a roadshow, said that she was impressed with the economic
recovery in emerging markets and wanted to know more about Malaysia's credit story.
Fifteen investors including those from Aetna, Scudder, Fidelity, and Loomis Sayles,
attended the roadshow in Boston on Monday.
The roadshow is to promote the proposed US$2 billion bond offering, which is lead-managed
by Salomon Smith Barney.
After travelling eight days covering Hong Kong, Tokyo, Milan, Frankfurt, and key
US cities including Chicago, Boston, Hartford, to promote the bond, the three teams
are finally converging in New York.
In New York more talks were held with investors later yesterday before the launching
and pricing of the bond scheduled for today and Thursday.
An industry analyst who has been closely monitoring the roadshow noted that investors
seemed excited about Malaysia's credit story and impressed with its credible reforms.
He said that the breathing space provided by the imposition of selective capital
controls had been used extremely well and reforms appear to be taking root.
"I see a turnaround in growth and Malaysia looks poised to recover ahead of
its neighbours," he said.
Standard & Poor's has rated Malaysia's foreign currency debt at triple-B minus
while Moody's Investor's Service ranks Malaysia's rating at Ba1.
Managing Director of the International Monetary Fund, Michel Camdessus said in Seoul
on Thursday that countries in the region were close to or even past the turning point.
"Most clearly in South Korea, the Philippines, and increasingly in Thailand
and Malaysia, we see signs of an upturn in activity," he said.SG Global Research,
a unit of French bank Societe Generale, reported that "the outlook remains positive
with faster and sharper than expected economic recovery across the region, rising
earnings estimates, continuing corporate restructuring and global portfoho inflows."
However, regional markets are worrying about a possible interest rate increase in
the US and its implication for Asia after the Federal Reserve Chairman, Alan Greenspan,
warned last Tuesday of a slight in its bias towards a tighter monetary policy, the
research unit said.
A market watcher here said, Greenspan comments had "spooked" the markets
by leaning towards raising interest rates.
There were concerns that spreads on bonds, especially emerging bonds, had widened.
Investors, however, were showing keen interest in Malaysia's bond offering, "but
they're also concerned about the market condition in general," he added.
Malaysia called off a bond issue last year after international rating agencies downgraded
its credit rating.
Under such circumtances, Malaysia would have had to pay high interest rates, at around
15 per cent. -- Bernama
Arcticle extracted from New Straits Times, Malaysia
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