The Edge Daily- 15 September 2008
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Published by The Edge Communications Sdn Bhd Sep 15, 2008 Choose a region Edge Malaysia
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12.30pm: KLCI 1,028.17 (-15.86); FBMEmas 6,833.28 (-110.85); FBM2BRD 4,948.70 (-79.88); Up 66; Down 385; Unch 149; Vol: 126
15-09-2008: BPAM working on solutions to boost bond market by Sharmila Ganapathy Email us your feedback at [email protected]
KUALA LUMPUR: The country’s bond pricing agency, Bond Pricing Agency Malaysia Sdn Bhd (BPAM), formerly Bondweb Malaysia Sdn Bhd, is working on several solutions to aid the development of the domestic bond market. “We have developed a bond index and we hope to have it online by year-end,” its chief operating officer Meor Amri Meor Ayob told The Edge Financial Daily in a recent interview. Bondweb’s name change to BPAM takes effect today. Meor Amri said the renaming of the agency was to more accurately reflect its function as a bond pricing agency. Currently, there is no central index for investors to track bond prices and trades in the Malaysian bond market, be it for corporate or government bonds. This was unlike for equities, Meor Amri pointed out, where both retail and professional investors were able to access equity quotes and trades online via the Bursa Malaysia website as well as various other online sources.
How to Protect Your Money Protection for your bank savings up to RM60,000. Find out how. www.pidm.gov.my
Try Forex Trading Free $50,000 practice account with charts, news, research & analysis. www.Forex.com
He explained that once bondholders and potential investors were able to access the most current bond data via the index,it could eventually lead to the development of a bond futures market. The index, which is currently undergoing final user testing, will be made available to Bondweb subscribers. Another solution that Bondweb is looking at is market-implied ratings, a relatively new concept in this part of the world although it has been implemented in developed bond markets such as the United States and Europe. “We are studying the feasibility of introducing market-implied ratings. In the equities space, you have analysts who focus on the technicals and others on the fundamentals of equities and companies,” Meor Amri said. Worldwide, market-implied ratings are offered by global rating agencies Moody’s, Fitch and global equity indices provider MSCI Barra. Locally, credit rating analysts address the fundamentals of bonds and their issuers. “However, it is possible that if a ratings agency does not have access to management accounts or management, they may end up using historical data and this could lead to a lagging effect,” Meor Amri added. Market-implied ratings, on the other hand, are a predictive model that derives ratings from the market prices of bonds and other types of debt instruments as well as credit default swaps. Hence, proponents said this model was able to more accurately predict ratings movements by ratings agencies. According to Meor Amri, through its own internal research, Bondweb has been able to predict a 70% likelihood that a company would experience a rating change within six months. For instance, bondholders who actively trade bonds would be able to take pre-emptive measures, as they would have six months to hedge their portfolios, he said.
Retirement Cash-Advance? Free report on how to Collect cash this year and every year for life DailyWealth.com/Retirement
Fixed Income Bond 3 Biggest Myths of Dividend Investing - Free Report! www.investorsdailyedge.com
EdgeDaily Exclusives 15-09-2008: Deutshce Bank slashes KLCI target to 975 points. 15-09-2008: KLCI at lowest since Nov06 at midmorning
“We also hope to offer volatility data to clients such as banks, insurance companies and other
9/15/2008 2:25 PM
theedgedaily.com
2 of 3
http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Art...
bondholders. Then they would be available to study daily volatility and by knowing the most and least volatile debt instruments being traded, bondholders would be able to do more active portfolio management,” he said.
15-09-2008: Tenaga: No more than 40% of
The bond pricing agency is also exploring the possibility of exporting its expertise and offer consultancy to neighbouring Asian countries. He said the agency was hoping to work with Indonesia, which is establishing its own bond pricing agency PT Penilai Harga Efek. Bondweb, which has over 70 clients, had also visited Egypt, Meor Amri said.
15-09-2008: Journalists not above the law, but police should not use ISA
Bakun
to intimidate 15-09-2008: The subject that won’t go
Printable Version | Email to a Friend
away 15-09-2008: Bursa mulls new derivatives contracts to boost global standing 15-09-2008: AISB to boost overseas sales 15-09-2008: MAHB sets year-end timeline yet again 15-09-2008: MNP changes rules of engagement 15-09-2008: Tenaga no better off with lifting of windfall levy 15-09-2008: Portfolio funds outflow to continue 15-09-2008: Falling oil price yet to ease high inflation 15-09-2008: Slower growth of 5.3% for M’sia in 2009, says DBS 15-09-2008: Cement industry fears 9MP projects further delayed 15-09-2008: AmResearch cuts plantation firms earnings forecast. 15-09-2008: Positive outlook on glove industry 15-09-2008: Sunzen focusing on regional expansion 15-09-2008: RBS launches new series of structured investment product 15-09-2008: BPAM working on solutions to boost bond market 15-09-2008: Sukuk issuance hit by global credit conditions
9/15/2008 2:25 PM
theedgedaily.com
3 of 3
http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Art...
15-09-2008: Industry players mixed on High Court judgment on BBA 15-09-2008: Analysts mixed on ‘chain listing’ 15-09-2008: InvestPenang to support INDEE 2008 KL 15-09-2008: Zaid criticises use of ISA, prepared to quit 13-09-2008: PR seeks meeting with Pak Lah 13-09-2008: I did not order detentions, says Syed Hamid 13-09-2008: A one-day ISA detention for Tan 13-09-2008: ISA arrests an utter disappointment 13-09-2008: Sin Chew journalist released 13-09-2008: Kit Siang: Abdullah cracking down to shore up his position in Umno 13-09-2008: Teresa’s parents still in the dark 13-09-2008: Journalist taken to Bukit Aman 13-09-2008: US summons top official over ISA detentions 13-09-2008: Guan Eng calls for meeting with all political parties 13-09-2008: Syed Hamid: Journalist could be released today
About Us | Terms of Use ©All rights reserved. 2006. The Edge Communications Sdn Bhd. (266980-X)
9/15/2008 2:25 PM
1 of 3
http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Art...
Published by The Edge Communications Sdn Bhd Sep 15, 2008 Choose a region Edge Malaysia
username
password
6
search
* Join now for FREE!
12.30pm: KLCI 1,028.17 (-15.86); FBMEmas 6,833.28 (-110.85); FBM2BRD 4,948.70 (-79.88); Up 66; Down 385; Unch 149; Vol: 126
15-09-2008: BPAM working on solutions to boost bond market by Sharmila Ganapathy Email us your feedback at [email protected]
KUALA LUMPUR: The country’s bond pricing agency, Bond Pricing Agency Malaysia Sdn Bhd (BPAM), formerly Bondweb Malaysia Sdn Bhd, is working on several solutions to aid the development of the domestic bond market. “We have developed a bond index and we hope to have it online by year-end,” its chief operating officer Meor Amri Meor Ayob told The Edge Financial Daily in a recent interview. Bondweb’s name change to BPAM takes effect today. Meor Amri said the renaming of the agency was to more accurately reflect its function as a bond pricing agency. Currently, there is no central index for investors to track bond prices and trades in the Malaysian bond market, be it for corporate or government bonds. This was unlike for equities, Meor Amri pointed out, where both retail and professional investors were able to access equity quotes and trades online via the Bursa Malaysia website as well as various other online sources.
How to Protect Your Money Protection for your bank savings up to RM60,000. Find out how. www.pidm.gov.my
Try Forex Trading Free $50,000 practice account with charts, news, research & analysis. www.Forex.com
He explained that once bondholders and potential investors were able to access the most current bond data via the index,it could eventually lead to the development of a bond futures market. The index, which is currently undergoing final user testing, will be made available to Bondweb subscribers. Another solution that Bondweb is looking at is market-implied ratings, a relatively new concept in this part of the world although it has been implemented in developed bond markets such as the United States and Europe. “We are studying the feasibility of introducing market-implied ratings. In the equities space, you have analysts who focus on the technicals and others on the fundamentals of equities and companies,” Meor Amri said. Worldwide, market-implied ratings are offered by global rating agencies Moody’s, Fitch and global equity indices provider MSCI Barra. Locally, credit rating analysts address the fundamentals of bonds and their issuers. “However, it is possible that if a ratings agency does not have access to management accounts or management, they may end up using historical data and this could lead to a lagging effect,” Meor Amri added. Market-implied ratings, on the other hand, are a predictive model that derives ratings from the market prices of bonds and other types of debt instruments as well as credit default swaps. Hence, proponents said this model was able to more accurately predict ratings movements by ratings agencies. According to Meor Amri, through its own internal research, Bondweb has been able to predict a 70% likelihood that a company would experience a rating change within six months. For instance, bondholders who actively trade bonds would be able to take pre-emptive measures, as they would have six months to hedge their portfolios, he said.
Retirement Cash-Advance? Free report on how to Collect cash this year and every year for life DailyWealth.com/Retirement
Fixed Income Bond 3 Biggest Myths of Dividend Investing - Free Report! www.investorsdailyedge.com
EdgeDaily Exclusives 15-09-2008: Deutshce Bank slashes KLCI target to 975 points. 15-09-2008: KLCI at lowest since Nov06 at midmorning
“We also hope to offer volatility data to clients such as banks, insurance companies and other
9/15/2008 2:25 PM
theedgedaily.com
2 of 3
http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Art...
bondholders. Then they would be available to study daily volatility and by knowing the most and least volatile debt instruments being traded, bondholders would be able to do more active portfolio management,” he said.
15-09-2008: Tenaga: No more than 40% of
The bond pricing agency is also exploring the possibility of exporting its expertise and offer consultancy to neighbouring Asian countries. He said the agency was hoping to work with Indonesia, which is establishing its own bond pricing agency PT Penilai Harga Efek. Bondweb, which has over 70 clients, had also visited Egypt, Meor Amri said.
15-09-2008: Journalists not above the law, but police should not use ISA
Bakun
to intimidate 15-09-2008: The subject that won’t go
Printable Version | Email to a Friend
away 15-09-2008: Bursa mulls new derivatives contracts to boost global standing 15-09-2008: AISB to boost overseas sales 15-09-2008: MAHB sets year-end timeline yet again 15-09-2008: MNP changes rules of engagement 15-09-2008: Tenaga no better off with lifting of windfall levy 15-09-2008: Portfolio funds outflow to continue 15-09-2008: Falling oil price yet to ease high inflation 15-09-2008: Slower growth of 5.3% for M’sia in 2009, says DBS 15-09-2008: Cement industry fears 9MP projects further delayed 15-09-2008: AmResearch cuts plantation firms earnings forecast. 15-09-2008: Positive outlook on glove industry 15-09-2008: Sunzen focusing on regional expansion 15-09-2008: RBS launches new series of structured investment product 15-09-2008: BPAM working on solutions to boost bond market 15-09-2008: Sukuk issuance hit by global credit conditions
9/15/2008 2:25 PM
theedgedaily.com
3 of 3
http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Art...
15-09-2008: Industry players mixed on High Court judgment on BBA 15-09-2008: Analysts mixed on ‘chain listing’ 15-09-2008: InvestPenang to support INDEE 2008 KL 15-09-2008: Zaid criticises use of ISA, prepared to quit 13-09-2008: PR seeks meeting with Pak Lah 13-09-2008: I did not order detentions, says Syed Hamid 13-09-2008: A one-day ISA detention for Tan 13-09-2008: ISA arrests an utter disappointment 13-09-2008: Sin Chew journalist released 13-09-2008: Kit Siang: Abdullah cracking down to shore up his position in Umno 13-09-2008: Teresa’s parents still in the dark 13-09-2008: Journalist taken to Bukit Aman 13-09-2008: US summons top official over ISA detentions 13-09-2008: Guan Eng calls for meeting with all political parties 13-09-2008: Syed Hamid: Journalist could be released today
About Us | Terms of Use ©All rights reserved. 2006. The Edge Communications Sdn Bhd. (266980-X)
9/15/2008 2:25 PM
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