Fixed Income Research KDN PP 16084/10/2012 (030859)

Transcription

1 Fixed Income Research KDN PP 16084/10/2012 (030859) Vol.: FI/002/2018 D E C E M B E R 2017 Monthly Bond Market & Rating Snapshot FINANCIAL VARIABLE NOV-17 DEC-17 M-O-M CHANGE OVERNIGHT POLICY RATE (%) bp 3-YEAR BENCHMARK MGS (%) bps 10-YEAR BENCHMARK MGS (%) bps 3-YEAR IRS (%) bps 10-YEAR IRS (%) bp RINGGIT 3-YEAR AAA (%) bps RINGGIT 3-YEAR AA (%) bps RINGGIT 3-YEAR A (%) bps 2-YEAR US TREASURY (%) bps 10-YEAR US TREASURY (%) bp MYR/USD % US DOLLAR INDEX % BRENT CRUDE (USD/BARREL) % GOLD SPOT (USD/OUNCE) 1, , % KLCI Index 1, , % S&P 500 Index 2, , % Fixed Income Research led by: Global Markets 2 It was an eventful December for global bond markets with investors kept occupied by a stream of economic data, central bank meetings and fiscal developments. The accelerated flattening of the US Treasury (UST) curve is no surprise considering that the US Federal Reserve (Fed) announced its third interest rate hike of the year at its final meeting in December. Nor Zahidi Alias Chief Economist zahidi@marc.com.my Malaysian Government Bond Market 3 Yields on both MGS and GII papers were broadly lower in December with MGS making the most gains. Despite the rise in interest rate swap (IRS) rates back in November, buying interest in local govvies was unhindered in December. Support for local govvies came primarily from the ongoing appreciation of the ringgit, firmer crude oil prices and growing optimism on the Malaysian economy amid a slew of upbeat data releases. Ringgit 7 The ringgit ended December at its highest level for the year against the US dollar. It was up 445 pips at RM (November: RM4.0910), also its highest level since June Gains in the ringgit were supported by foreign inflows into the local bond and equity markets amid rising optimism on Malaysia s economic performance in the near term. Malaysian Corporate Bond Market 8 MARC Rating Activities 11

2 Global Markets A quick review The UST s accelerated flattening is no surprise given the US Fed s third interest rate hike of the year in December. European bond market sentiment turned bearish after the German government announced its plan to issue more debt than expected in UK gilts ended broadly higher after a volatile December. It was an eventful December for global bond markets with a stream of economic data, central bank meetings and fiscal developments keeping investors occupied. The accelerated flattening of the UST curve is no surprise considering that the Fed had announced its third interest rate hike of the year. In addition, there was the anticipation of a similarly aggressive rate hike going forward, as the Fed has predicted three rate increases in Longer-term UST yields were pressured by the Fed s reluctance to raise inflation forecasts despite robust GDP growth. While the US Senate finally approved the tax reform bill on December 2, bond investors seemed sceptical about its expansionary impact on the economy. As widely expected, the European Central Bank (ECB) kept its policy und at its December monetary policy meeting. In its monetary policy statement, it continued to stress the importance of monetary support to sustain growth, as well as lifting inflation to a healthy 2% level. On the euro zone s outlook, the ECB remained cautious on inflation even though it has expressed increasing confidence on economic growth, similar to US Fed. Meanwhile, sentiment in the European bond market turned bearish after the German government announced its plan to issue more debt than expected in In contrast, UK gilts ended broadly higher after a volatile December. Yields of UK gilts initially rose on optimism that European Union (EU) leaders will give the green light for Brexit negotiations to move to the second stage as this would offer more clarity on future trade and transition pacts between the UK and the EU. As the month progressed, however, the market started becoming more concerned with how the Brexit would affect the UK economy going forward, thereby stoking a haven flow into UK gilts. The 3Q2017 gross domestic product (GDP) report showed the UK economy growing 1.7% year-on-year (y-o-y) compared to 1.9% in 2Q2017, thus confirming the ongoing slowdown of the economy. Exhibit 1: Summary of US rates US rates (%) Federal Funds Rate (Upper Bound) bps 2-year UST bps 5-year UST bps 10-year UST bp 30-year UST bps Exhibit 3: Summary of UK rates UK rates (%) Bank of England Official Bank Rate bp 2-year Gilt bps 5-year Gilt bps 10-year Gilt bps 30-year Gilt bps Exhibit 2: Summary of euro rates Euro rates (%) European Central Bank Deposit Facility Rate bp 2-year Bund bps 5-year Bund bps 10-year Bund bps 30-year Bund bps Exhibit 4: Summary of Japan rates Japan rates (%) Bank of Japan Short-term Interest Rate bp 2-year JGB bps 5-year JGB bp 10-year JGB bp 30-year JGB bps 2

3 May-16 Jul-16 Nov-16 Malaysian Government Bond Market Primary market review Monthly Bond Market & Rating Snapshot Surge in MGS issuances in December contributed to the total growth outstanding of local govvies. December s primary market was weak with both the MGS and GII issues recording low BTCs. In December, the combined outstanding of Malaysian Government Securities (MGS) and Government Investment Issue (GII) papers rose by RM5.0 billion to RM632.7 billion (November 2017: RM627.7 billion). Growth was led by a significant surge in MGS issuances that amounted to RM8.9 billion, the highest monthly issuance for the year. For the whole of 2017, total local govvies (MGS/GII) issued amounted to RM113.9 billion (2016: RM86.0 billion), the highest level of issuance in history. Total issuance for 2017 was in line with MARC s projection of RM105.0 billion to RM110.0 billion. Overall, MGS dominated the primary market for local govvies in 2017, as evidenced by the GII-to-MGS ratio of 47:53 (2016: 49:51). Primary market performance was weak in December with the government receiving bids amounting to RM6.6 billion for two issues in the public auction market. December s bids were the lowest received for the year. In the previous month, the bids for the three November issues had reached RM18.3 billion. December s two issues comprised the RM2.0 billion 10y reopening of MGS and the RM2.0 billion 15.5y new issue of GII. The MGS issue of 7 th December 2017 drew a bid-to-cover (BTC) ratio of 1.5x, the lowest BTC for the year. The subdued demand was due to the weaker performance of the secondary market that week amid heightened expectations of a Federal Funds Rate (FFR) hike. Demand for the GII, which was issued on 15 th December 2017, was also lacklustre. The issue commanded a BTC of 1.8x, the lowest for similar issues since February Exhibit 5: Summary of Malaysian government securities statistics (RM billion) Gross issuance Redemption Net issuance Total outstanding MGS GII Total MGS GII Total MGS GII Total MGS GII Total Source: BNM Bond Info Hub, Exhibit 6: Malaysian government securities auction results in December Issues Tenure Amount Average yield Issue date BTC (x) (years) (RM mil) (%) 10-year reopening of MGS (Mat on 11/27) , year new issue of GII (Mat on 06/33) , Source: BNM Fast, Exhibit 7: Total outstanding MGS/GII papers in December 2017 continued to rise amid higher MGS issuances Exhibit 8: BTC ratios of MGS and GII papers for the past one year Issuance (LHS) Redemption (LHS) Outstanding (RHS) 4.0 MGS GII 1-year average BTC ratio RMmillion 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - Outstanding (RM million) 660, , , , , , , , Source: BNM Bond Info Hub, Source: BNM Fast, 3

4 Secondary market review Local govvies recorded gains in December albeit on lower trading volume, supported by a stronger ringgit, firmer crude oil prices and optimism on the economy. The benchmark MGS yield curve shifted downwards with yields across most tenors lower. Compared to November, local govvies ended December on a stronger footing. Yields on both MGS and GII papers were broadly lower with MGS making the most gains. However, the total trading volume of local govvies fell to RM28.3 billion (November: RM63.7 billion) on a lack of trading interest as traders took off for the year-end holidays. Despite the increase in interest rate swap (IRS) rates back in November, buying interest for local govvies were unhindered in December. Support came from the ongoing appreciation of the ringgit, firmer crude oil prices, as well as growing optimism on Malaysia s economy amid a slew of upbeat data releases. As of end-december, the benchmark MGS yield curve had shifted lower m-o-m with most tenors seeing lower yields. Benchmark MGS yields along the 3y7y curve shed three bps to eight bps while yields along the 15y20y curve shed six bps to seven bps. Meanwhile, the benchmark yield on the 10y MGS was higher by two bps at 3.89% on profit-taking activities during the last week of December. As a result, the 10/3 MGS spread widened by 10 bps to 59 bps in December. Exhibit 9: Daily performance of three- and 10-year MGS yields throughout December 2017 Volume (RM million, RHS) 3Y MGS (LHS) 10Y MGS (LHS) *MGS yields being rebased to 100 on 30 November 2017 Positive October trade data released IMF announced 2018 GDP growth projection of 5.0%-5.5% for Malaysia US Fed less hawkish than expected, kept its 2018 FFR hike projection Nervous sentiment ahead of November CPI data release and US tax reform vote MGS mirroed minor global govvies sell-off ahead of key US economic data releases 2,500 2,000 1,500 Ringgit settled at highest level against the greenback for the 1,000 year on 29 December at Source: Bloomberg, BPAM, Exhibit 10: MGS benchmark yields MGS yields Change 3-year MGS 3.40% 3.32% -8 bps 5-year MGS 3.60% 3.53% -7 bps 7-year MGS 3.91% 3.88% -3 bps 10-year MGS 3.89% 3.91% 2 bps 15-year MGS 4.46% 4.39% -7 bps Exhibit 11: OPR and Interest Rate Swap (IRS) rates Rates Change Overnight Policy Rate 3.00% 3.00% 0 bp 1-year IRS 3.64% 3.65% 1 bp 3-year IRS 3.73% 3.75% 2 bps 5-year IRS 3.82% 3.83% 1 bp 10-year IRS 4.06% 4.06% 0 bp 4

5 Exhibit 12: MGS yield curves Exhibit 13: MYR IRS curves m-o-m (RHS) end-november (LHS) end-december (LHS) % bps Maturities (Years) Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 3Y 5Y 7Y 10Y Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Exhibit 14: Malaysia s 5Y Credit Default Swap (CDS) curve Exhibit 15: 10Y/3Y MGS spread Malaysia 5-year CDS (bps) Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec Y/3Y MGS Spread (bps) Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Exhibit 16: Top five local govvies trades for December 2017 Security Traded amount (RM mil) Issue tenure (Years) Last traded yield MGS 4/ % , % MGS 5/ % , % MGS 2/ % , % GII MURABAHAH 3/ % , % MGS 2/ % , % Exhibit 17: Summary of MGS trading volume (RM million) based on maturity profile < 3M 3M -6M 6M - 1Y 1Y - 2Y 2Y - 3Y 3Y - 5Y 5Y - 7Y 7Y 10Y > 10Y 15, ,728 4,785 2,816 5,928 4,763 4,214 4,154 2,397-3,050 1, ,367 2,716 4,137 1,808-12, ,539-2,067-2, ,

6 Exhibit 19: Foreign holdings of ringgit bonds as percentage of total outstanding Exhibit 20: Monthly foreign flows and total foreign holdings of local bonds in 2016 and % 53.5% 43.5% 33.5% Total foreign holdings (RM million, RHS) MGS GII Corporate bonds Total 250, , % 150,000 RM million 15,000 10,000 5,000 - (5,000) MGS GII Others Total foreign holdings (%) 21.0% 20.0% 19.0% 18.0% 23.5% 13.5% 100, % 50, % (10,000) (15,000) (20,000) (25,000) 17.0% 16.0% 15.0% 3.5% 3.9% - (30,000) 14.0% Jan-16 May-16 Jul-16 Nov-16 Jan-16 May-16 Jul-16 Nov-16 Foreign holdings Foreign investors continued to be net buyers of local govvies in December on continued outperformance of the ringgit. For the second consecutive month in December, foreign investors were net buyers of local govvies. As a result, foreign holdings rose to RM186.3 billion, buoyed by inflows into both MGS (RM4.1 billion) and GII (RM0.6 billion) on the continued outperformance of the ringgit. Consequently, total foreign ownership of both MGS and GII increased in December, rising to 45.1% and 6.9% of total outstanding, respectively, amid a higher net issuance of RM5.0 billion (November: RM1.5 billion). Meanwhile, foreign holdings of Malaysian Treasury Bills (MTB) in December came in lower at RM2.4 billion (November: RM3.1 billion). The foreign holdings of Malaysian Islamic Treasury Bills (MITB), on the other hand, remained und at RM0.9 billion. The lower foreign holdings of short-term local govvies is as expected given the higher demand for longer-tenured papers amid rising optimism over Malaysia s economic growth outlook N Exhibit 18: Summary of foreign holdings in local govvies Foreign holdings (RM mil) Composition (%) Foreign flows (RM mil) MGS 160, , ,095 4,125 GII 17,932 18, , MGS+GII 178, , ,228 4,689 Treasury bills 4,044 3, , Total 182, , ,603 3,976 Source: BNM, Source: BNM, BPAM, Source: BNM, BPAM, 6

7 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Monthly Bond Market & Rating Snapshot Ringgit Against the US dollar The ringgit ended December at its highest level since June 2016 at RM against the US dollar. In December, the ringgit settled at its highest level for the year against the US dollar. Up by 445 pips at RM against the greenback from RM in November, that was also its highest level since June Support for the ringgit had come from foreign inflows into the local bond and equity markets amid rising optimism over the country s economic growth prospects with both international rating agencies and research houses upgrading their 2018 GDP growth forecasts. There was also support from upbeat October trade data and firmer crude oil prices amid the extension of oil output cuts by the Organisation of the Petroleum Exporting Countries (OPEC). The US Fed s decision to maintain its projection of the number of FFR hikes for 2018 also lent its support to the ringgit. Against other major currencies The local note ended the year mixed against other major currencies. The ringgit ended December mixed against other major currencies. It rose against the Japanese yen and the pound sterling to RM per JPY100 and RM5.4682, respectively, but fell against the Singapore dollar and the euro to RM and RM4.8445, respectively. Exhibit 21: Asian currencies against USD (% m-o-m) Exhibit 22: Major currencies against MYR (% m-o-m) Indonesian rupiah -0.4 Indonesian rupiah -1.3 Japanese yen -0.1 Japanese yen -1.2 Hong Kong dollar 0.0 Hong Kong dollar -1.1 Thai baht 0.3 Thai baht US dollar Malaysian ringgit Philippine peso Singapore dollar Indian rupee USD Strengthened USD w eakened Pound sterling Taiwanese dollar Swiss franc Singapore dollar -0.6 MYR strengthened MYR weakened Taiwanese dollar 1.1 Offshore Chinese renminbi 1.5 South Korean won Euro 0.05 Offshore Chinese renminbi 0.8 South Korean won 0.8 Australian dollar Exhibit 23: Daily performance of the ringgit versus FBM KLCI, BRENT crude and 10y MGS Exhibit 24: Monthly performance of the ringgit versus foreign holdings of short-term local bonds and MGS RM337.7 mil foreign flow into Bursa RM495.3 mil foreign flow into Bursa Foreign investors disposed RM38.2 mil from Bursa. RM165.1 mil foreign flow into Bursa Foreign Holdings of ST Papers (%, LHS) MYR/USD (Reverse scale, RHS) Foreign Holdings of MGS (%, LHS) *KLCI, Brent & 10y MGS rebased to 100 at 30th November KLCI Brent 10y MGS USD/MYR (Reverse order, RHS) Source: Bloomberg, MIDF, Source: Bloomberg, BNM, 7

8 Malaysian Corporate Bond Market Monthly Bond Market & Rating Snapshot Higher local corporate bond issuances in December attributed to higher issuances from the unrated corporate bonds segment gross issuance of corporate bonds amounted to RM122.9 billion, the highest recorded since Total gross issuance of corporate bonds in December increased by RM1.7 billion or 14.4% m-o-m to RM13.8 billion. Growth was mainly attributed to higher issuances from the unrated corporate bonds segment, which came in at RM3.8 billion. Issuances in the segment were led by PNB Merdeka Ventures Sdn Bhd s six tranches of Islamic Medium-term Notes (IMTN) worth RM1.9 billion. Meanwhile, all the other corporate bond segments recorded decreases in December, with the unrated government-guaranteed (GG) bonds segment showing the biggest decline. For the whole of 2017, the total gross issuance of long-term corporate bonds came in 45.0% higher than the previous year at RM122.9 billion, and the highest level reached since 2012 (RM123.8 billion). All corporate bond segments registered y-o-y increases in 2017, with rated corporate bonds contributing the most towards gross issuances. Among the top issuers were DanaInfra Nasional Berhad (RM10.2 billion), Cagamas (RM8.7 billion), Lembaga Pembiayaan Perumahan Sektor Awam (LPPSA) (RM6.8 billion), Prasarana Malaysia Bhd (RM6.0 billion), and CIMB Bank Bhd (RM4.5 billion). Exhibit 25: Summary of corporate bond issuance in December 2017 (RM billion) Year Unrated corporate bonds Unrated governmentguaranteed Total unrated Rated corporate bonds Cagamas Total rated Total corporate bonds Exhibit 26: Historical trend of bond issuance by category (RM billion) Year Unrated corporate bonds Unrated governmentguaranteed Total unrated Note: Numbers may not necessarily add up to total due to rounding. Rated corporate bonds Cagamas Total rated Total corporate bonds Exhibit 27: Top three corporate bond issuers in December 2017 Issuer Industry Categor No. of Amount Tenure Coupon Principle y issues (RM bil) (Years) (%) Maybank Islamic Berhad Financial AAA & AA 1 - Islamic services rated Perpetual Prasarana Malaysia Berhad Transportation GG Islamic Cagamas Berhad Property & real estate Cagamas Conventional

9 Exhibit 28: The financial services sector remained the primary contributor for corporate bond issuances as of December 2017 Exhibit 29: Outstanding size of Cagamas and corporate bonds as of December 2017 (RM billion) Financial services RM billion 61.4 Asset class Conventional Islamic Total Infrastructure & utilities 19.9 Property & real estate Transportation Trading & services Diversified holdings Cagamas 7% AAA 16% Cagamas Corporate Bonds Mining & petroleum Asset-backed securities Construction & engineering Public finance Industrial products Plantation & agriculture GG 31% Unrated 17% A & below 4% AA 25% Corporate Corporate guaranteed Financial ABS Exhibit 30: Corporate bonds outstanding: Conventional & Islamic Exhibit 31: Corporate bonds outstanding: Distribution by rating band Islamic 67% AAA 27% AA 40% Conventional 33% Cagamas 7% Short-term 3% Not rated 17% BBB & below 2% A 4% Exhibit 32: AAA corporate benchmark yields AAA (%) 3-year 4.15% 4.13% -2 bps 5-year 4.34% 4.33% -1 bps 7-year 4.54% 4.49% -5 bps 10-year 4.72% 4.69% -3 bps Exhibit 33: AA/AA2 corporate benchmark yields AA/AA2 (%) 3-year 4.47% 4.46% -1 bp 5-year 4.66% 4.64% -2 bps 7-year 4.86% 4.83% -3 bps 10-year 5.08% 5.04% -4 bps Exhibit 34: A/A2 corporate benchmark yields A/A2 (%) 3-year 5.90% 5.87% -3 bps 5-year 6.45% 6.43% -2 bps 7-year 6.99% 6.96% -3 bps 10-year 7.76% 7.91% 15 bps Exhibit 35: AAA, AA/A2, A/A2 blended credit spreads AAA, AA/A2 & A/A2 (%) 3-year 164 bps 170 bps 6 bps 5-year 178 bps 183 bps 5 bps 7-year 182 bps 182 bps 0 bp 10-year 228 bps 232 bps 4 bps 9

10 Exhibit 36: AAA corporate bonds yield spread (bps) Exhibit 37: AA/AA2 corporate bonds yield spread (bps) 110 3Y 5Y 7Y 10Y 150 3Y 5Y 7Y 10Y Jan-16 May-16 Jul-16 Nov Jan-16 May-16 Jul-16 Nov-16 Exhibit 38: A/A2 corporate bonds yield spread (bps) Exhibit 39: 5Y blended credit spread (bps) Y 5Y 7Y 10Y year average 200 Jan-16 May-16 Jul-16 Nov Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Exhibit 40: Secondary market volume (RM billion) Asset class MGS/GII Cagamas FI corporate Non-FI corporate Exhibit 41: Non-FI corporate traded by rating band (RM billion) Rating band AAA AA A BBB and below Short-term

11 MARC Rating Activities In December, MARC assigned preliminary ratings to three investment-grade issuers. In December, MARC assigned preliminary ratings to three issuers, all investment-grade, i.e. rated AA- or above. It also assigned a final rating of AA IS with a stable outlook to Fortune Premiere s (wholly owned by IOI Properties Group) ringgit-denominated notes under its RM3.0 billion Multi- Currency MTN Programme (Sukuk Murabahah). A total of 14 issue ratings from eight issuers were reaffirmed by MARC in December. The rating outlook of 12 issues remained stable while two issues from Alpha Circle were revised to negative from stable. The outlook revision reflected MARC s increasing concern over impact on the company s cash flows coming from recent government policy s that affect foreign workers. Meanwhile, there were no rating migration activities and no new issues were placed under MARCWatch in December. Exhibit 42: List of rating actions in December 2017 Principle Category Main sector Issuer Date announced Rating action Rating outlook Long-term rating Short-term rating Before After Before After Issue size (RM mil) Credit enhancement Unspecified Issuer Rating Finance Source: Credit Guarantee Corporation (M) Bhd 21- AFFIRMED STA AAA AAA 0 Conventional Structured Finance Property Kinabalu Capital Sdn Bhd 21- AFFIRMED STA AAA AAA 220 Conventional Structured Finance Property Kinabalu Capital Sdn Bhd 21- AFFIRMED STA AA AA 40 Conventional Structured Finance Property Kinabalu Capital Sdn Bhd 21- AFFIRMED STA A A 20 Conventional Structured Finance Property Kinabalu Capital Sdn Bhd 21- AFFIRMED STA MARC-1 MARC Islamic Project Finance Trading/Services Alpha Circle Sdn Bhd 20- AFFIRMED NEG AA- AA- 540 Islamic Project Finance Trading/Services Alpha Circle Sdn Bhd 20- AFFIRMED NEG A A 55 Conventional Project Finance Property Segi Astana Sdn Bhd 18- AFFIRMED STA AAA AAA 470 fg Conventional Project Finance Property Segi Astana Sdn Bhd 18- PRELIMINARY STA AA- AA- 415 Islamic Corporate Debt Finance CIMB Islamic Bank Bhd 18- PRELIMINARY STA AAA AAA 10,000 Conventional Corporate Debt Trading/Services KMCOB Capital Bhd 13- WITHDRAWN AAA AAA 320 fg Conventional Corporate Debt Trading/Services Boustead Holdings Berhad 7- WITHDRAWN STA AAA AAA 1,000 bg Islamic Corporate Debt Trading/Services DRB-Hicom Bhd 6- AFFIRMED STA A+ A+ 1,800 Islamic Corporate Debt Trading/Services DRB-Hicom Bhd 6- AFFIRMED STA A- A- 2,000 Unspecified Financial Strength Finance Islamic Islamic Islamic Corporate Debt Corporate Debt Project Finance Unspecified Financial Strength Finance Infrastructure & Utilities Infrastructure & Utilities Infrastructure & Utilities The Bank Of East Asia, Limited 5- AFFIRMED STA AAA AAA 0 Ranhill Capital Sdn Bhd 5- AFFIRMED STA AAA AAA 300 bg Ranhill Capital Sdn Bhd 5- AFFIRMED STA AAA AAA 500 fg SAJ Capital Sdn Bhd 5- PRELIMINARY STA AAA AAA 650 Kuwait Finance House (Malaysia) Bhd 4- AFFIRMED STA AA+ AA+ MARC-1 MARC-1 0 Islamic Corporate Debt Property Fortune Premiere Sdn Bhd 4- INITIAL STA AA AA 3,000 Exhibit 43: MARCWatch placements, by issue count Exhibit 44: MARC rating migrations, by issue count 6 MARCWatch NEG MARCWatch DEV 40 Upgrades Downgrades Defaults DEC-11 DEC-12 DEC-13 DEC-14 DEC-15 DEC-16 DEC Source: Source: 11

12 Disclaimer Copyright 2018 Malaysian Rating Corporation Berhad and any of its subsidiaries or affiliates ( MARC ) have exclusive proprietary rights in the data or information provided herein. This document is the property of MARC and is protected by Malaysian and international copyright laws and conventions. The data and information shall only be used for intended purposes and not for any improper or unauthorised purpose. All information contained herein shall not be copied or otherwise reproduced, repackaged, transmitted, transferred, disseminated, redistributed or resold for any purpose, in whole or in part, in any form or manner, or by any means or person without MARC s prior written consent. Any opinion, analysis, observation, commentary and/or statement made by MARC are solely statements of opinion based on information obtained from issuers and/or other sources which MARC believes to be reliable and therefore, shall not be taken as a statement of fact under any circumstance. MARC does not and is in no position to independently audit or verify the truth and accuracy of the information contained in the document and shall not be responsible for any error or omission or for the loss or damage caused by, resulting from or relating to the use of such information. NEITHER MARC NOR ITS AFFILIATES, SUBSIDIARIES AND EMPLOYEES, GIVE ANY EXPRESS OR IMPLIED WARRANTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY AS TO THE ACCURACY, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR USE OF ANY SUCH INFORMATION. This document is not a recommendation to buy, sell or hold any security and/or investment. Any user of this document should not rely solely on the credit rating and analysis contained in this document to make an investment decision in as much as it does not address non-credit risks, the adequacy of market price, suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security concerned. MARC and its affiliates, subsidiaries and employees shall not be liable for any damage or loss arising from the use of and/or reliance on documents produced by MARC or any information contained therein. Anyone using and/or relying on MARC s document and information contained therein solely assumes the risk in making use of and/or relying on such document and all information contained therein and acknowledges that this disclaimer has been read and understood, and agrees to be bound by it Malaysian Rating Corporation Berhad Published and Printed by: MALAYSIAN RATING CORPORATION BERHAD (Company No.: V) 19-07, 19 th Floor, Q Sentral, 2A Jalan Stesen Sentral 2, Kuala Lumpur Sentral, KUALA LUMPUR Tel.: Fax: marc@marc.com.my Homepage: