Moody’s Investors Service (Moody’s) has assigned an A3 senior unsecured rating to the Government of Malaysia’s proposed USD-denominated Sukuk certificates with maturities of 10 and 30 years to be issued by special purpose vehicle, Malaysia Wakala Sukuk Berhad.  

Ratings Rationale 

The rating of the Sukuk is on par as the issuer ratings of the Government of Malaysia as Sukuk holders will be exposed to the Government’s senior unsecured credit risk, will not be exposed to performance risk of the portfolio assets, will not have preferential claim or recourse over trust assets and will only have rights against the Government, ranking pari passu with other senior unsecured obligations.  

Malaysia’s A3 rating reflects its moderately large, diversified and competitive economy, strong medium term growth potential, as well as sufficient natural resources. In addition, effective macroeconomic policymaking institutions provide stability and support economic resilience of the country.  

However, the Government’s narrow revenue base limits fiscal flexibility, its high debt burden and weak debt affordability.  

Details 

• Proceeds of the Sukuk will be used to purchase a Wakalah asset pool consisting of vouchers to be used on selected public transport in Malaysia. Assets will be managed by the Government, acting as the agent, who will collect all returns against periodic distribution amounts due.  
• The ratings may be upgraded if fiscal consolidation prospects were to improve through measures that widen the revenue base, which would lead to a sustained decrease in debt burden and improvement in debt affordability.  
• The ratings may be downgraded if there is further weakening in the Government’s debt and debt affordability metrics, a rise in contingent liabilities and less commitment to medium-term fiscal consolidation, resulting in continued weakening of the Government’s fiscal strength.  

At a webinar titled Halal360: Connecting your Business to the Halal Ecosystem, held on the 19th of April 2021, business leaders from Bangladesh and Malaysia discussed how the two countries can tap into the Halal ecosystem and collaborate further. This was stated in a press release issued by Standard Chartered Bangladesh, one of the co-organisers of the event. 

Why it Matters?  

Chief Executive Officer of Standard Chartered Bangladesh, Naser Ezaz Bijoy, said that the global Halal industry is forecast to grow to USD 3.1 trillion by 2023. Therefore, with the right collaborative approach, companies in both countries are well-positioned to tap into this ever-growing market, to catalyse growth within their economies. The Halal market has expanded from just food and beverage products to now include cosmetics, pharmaceuticals, modest fashion and tourism.    

Details  

• The webinar was organised in collaboration with Standard Chartered Malaysia. 
• High Commissioner of Bangladesh to Malaysia, Md Golam Sarwar, was the keynote speaker, according to media reports.  
• The webinar was hosted by Head of Corporate Affairs, Brand and Marketing at Standard Chartered Bangladesh, Bitopi Das Chowdhury. The panel was moderated by Executive Director of Islamic Business and Product Management at Standard Chartered Saadiq, Malaysia, Bilal Parvaiz. 
• Chief Executive Officer of Standard Chartered Malaysia, Abrar A Anwar, also spoke at the event.  

• The panellists at the webinar included President of the Dhaka Chamber of Commerce and Industry, Rizwan Rahman, and Head of Halal Consultancy and Advisory at Halal Development Corporation Berhad, Malaysia, Dhaliff Anuar.