Malaysia to issue Samurai bond next month

KUALA LUMPUR: The Malaysian government will issue its ¥200 billion (RM7.4 billion) Samurai bond next month, said Finance Minister Lim Guan Eng.

The 10-year bond is guaranteed by the Japanese government.

“The coupon rate will probably not exceed 0.65%,” Lim said at The Exchange TRX launch here today.

The Samurai bond issuance was initiated by Prime Minister Tun Dr Mahathir Mohamad, who requested his Japanese counterpart Shinzo Abe for yen-denominated credit in June last year.

Mahathir has said that Samurai bonds are cost-effective, and they will be used to reduce debt accumulated by the previous government.

The Samurai bond sale will be Malaysia’s first in three decades, having last raised such debt in 1989.

Meanwhile, Lim said there are various fiscal reforms being implemented as part of the government’s wider institutional restructuring that will not only further improve investors’ confidence in Malaysia, but also increase public trust in the government.

These measures include the adoption of open tenders, the establishment of the Tax Reforms Committee, the proposed Government Procurement Act and Fiscal Responsibility Act, as well as the ongoing migration towards accrual from cash-basis accounting.

“I expect a majority of these reforms to be completed in three years and they will provide a strong foundation which Malaysia will rise up and take its rightful place as one of the Asian Tigers,” said Lim.

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