Cagamas Achieves Highest Turnover in Secondary Market for Fixed Income

KUALA LUMPUR (May 5): Cagamas Bhd achieved the highest secondary market volume in fixed income market and among AAA rated papers in 2016, with total turnover more than tripling to RM17.1 billion from RM5.3 billion in 2015.

Cagamas continued to play an active role in facilitating intermediation in the Malaysian financial sector by providing liquidity, capital and risk management solutions to financial institutions, said the mortgage corporation’s holding company, Cagamas Holdings Bhd, in a statement.

“Cagamas has repositioned itself over the past few years and has added capacity to offer a broader range of financial solutions to sustain future growth,” said Cagamas chairman Datuk Ooi Sang Kuang.

According to the statement, Cagamas recorded larger bonds and sukuk issuances of RM7.4 billion in 2016 as compared with RM7.1 billion in 2015.

“The issuances in 2016 comprise RM4.9 billion bonds and RM2.5 billion sukuk. Of total issuances, 81% or RM6.0 billion were issued locally while the remaining balance internationally.

“Cagamas’ fixed income securities accounted for 5% of total outstanding corporate bonds and sukuk, and 19% of all outstanding AAA corporate bonds and sukuk in Malaysia,” it said.

Cagamas also retains its position as the second largest issuer of debt instruments after the government of Malaysia and the largest issuer of AAA corporate bonds and sukuk in the market.

For its financial year ended 2016, Cagamas Holdings’ pre-tax profit grew 2.8% to RM574.2 million, from RM558.3 million in 2015, driven by higher profit contribution from Cagamas MBS Bhd (CMBS).

The group’s core capital ratio (CCR) and risk weighted capital ratio (RWCR) stood at a high of 36.3% and 38% respectively as at end 2016. Excluding CMBS, the group’s CCR and RWCR would have been reduced to 26% and 27.8% respectively.

The group’s total shareholders’ funds increased to RM5.9 billion from RM5.6 billion while net tangible assets per share was higher at RM39.6, an increase of 6.7% from RM37.1 in 2015, said the statement.

Originally published on www.theedgemarkets.com