KUALA LUMPUR (Mar 11): Bank Negara Malaysia said Malaysia’s debt securities remained the largest in South East Asia in 2014, at 104.4% of gross domestic product (GDP).

In the central bank’s financial stability and payment systems report 2014, BNM said total outstanding debt securities grew 8.2% to RM1,117.0 billion in 2014 from RM1,032.5 billion in the previous year.

The nominal value of new issuances amounted to RM505.9 billion in 2014, compared to RM501.2 billion a year earlier.

The bank highlighted Cagamas Bhd's issuance of a three-year RMB1.5 billion (RM887 million) bond in September 2014. The bond had attracted a strong order with a bid-to-cover ratio of over three times and a fixed coupon rate of 3.7% a year.

“The landmark issuance, which carries the market name ‘Tiger Emas Bond’, represents the largest renminbi bond by a Malaysian issuer during the year.

"This was also the first renminbi and non-ringgit denominated bond to be settled via Malaysia’s Real-time Electronic Transfer of Funds and Securities System (RENTAS), affirming the capacity of RENTAS in supporting the issuance and depository of foreign currency bonds in the international markets," Bank Negara said.

Meanwhile, robust growth was also seen in the foreign exchange market. According to Bank Negara, the average daily turnover of foreign exchange transactions increased 13.5% year-on-year (y-o-y) to US$11.8 billion (RM43.68 billion) from US$10.4 billion.

To modernise the financial market infrastructure, Bank Negara had granted approval to a foreign electronic-money broker to provide an electronic-matching platform for the interbank foreign exchange market.

“The introduction of a foreign electronic-money broker forms part of Malaysia’s ongoing liberalisation of the foreign exchange market and is expected to accelerate the development of electronic channels that will extend efficiency gains and opportunities beyond the interbank market to other intermediaries and end-users,” said Bank Negara.

In line with the increase in intra-regional trade, 2014 also saw the operationalisation of a renminbi deposit and investment facility (RDIF) and the appointment of a designated renminbi clearing bank.

Bank Negara noted that onshore financial institutions had placed a total of RMB3.5 billion through RIDF during the year.