Cagamas to sell more Islamic bonds

CAGAMAS Bhd, Malaysia's biggest buyer of home loans, plans to increase sales of Islamic bonds as part of an effort to boost investor appetite for its debt after mortgage defaults triggered the global credit slump.

Cagamas, which expects to sell as much as RM15 billion of notes next year, wants overseas investors to hold about 20 per cent of its bonds from about 10 per cent now, chief executive officer Steven Choy said in an interview on November 18. About 30 per cent of its bonds comply with syariah law's ban on interest, he said.

Borrowers sold US$13.1 billion (RM47.42 billion) of Islamic bonds this year after raising a record US$30.8 billion (RM111.4 billion) from the securities in 2007 as an oil boom boosted Middle Eastern wealth.

Malaysia, which accounted for two-thirds of global Islamic bond sales last year, expects sales of the notes, known as sukuk, to increase by 20 per cent annually.