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US$170 bil in Malaysia pensions cry out for more Islamic bonds

Bloomberg Published on Thu, May 19, 2016 / 2:56 PM GMT+8

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KUALA LUMPUR (May 19): Malaysia’s biggest pension fund is calling on the government to increase the supply of ringgit Islamic bonds as the manager of US$170 billion ($$234 billion) starts a Shariah-compliant option for savers.

The Employees Provident Fund, the largest buyer of the country’s debt and stocks, said ideally half of sovereign bond sales should be sukuk as it prepares to launch the Islamic plan with an initial 100 billion ringgit ($34 billion) in January. Currently the Shariah-compliant share of issuance is 42%.

“The government is actively looking at it now,” Shahril Ridza Ridzuan, EPF’s chief executive officer, said in an interview in Kuala Lumpur. “If the government can push up sukuk issuance to 50%, that would be great.”