Islamic bonds in Malaysia are luring global investors seeking to profit from Asia’s second-best performing emerging-market currency, driving yields to lows.
The 5.9 percent Shariah-compliant notes maturing in December 2016 issued by Binariang GSM Sdn., owner of Malaysia’s largest mobile-phone operator, returned 10.4 percent so far this year, according to exchange operator Bursa Malaysia Bhd. The yield dropped seven basis points to 4.47 percent yesterday, the lowest since the debt was sold in December 2007. Malaysia’s 3.928 percent dollar-denominated sukuk due June 2015 returned 8 percent, prices from Royal Bank of Scotland Group Plc show.
Emerging markets will draw funds from abroad as developed nations pump cash into their slowing economies, increasing funds available to invest in higher-yielding assets, according to Bahrain Islamic Bank in Manama, CIMB-Principal Islamic Asset Management Bhd. and Credit Suisse Securities (Malaysia) Bhd. in Kuala Lumpur. The ringgit has rallied 10 percent this year against the dollar, the best advance after the Thai baht among the 10 most-active currencies in Asia outside of Japan.
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