Malaysia sukuk yield at 18-month high

Kuala Lumpur

PRIME Minister Najib Razak's plan to revive Malaysia's faltering economy is getting no help from the country's Islamic bond market.

Yields on government 10-year sukuk, used by companies to gauge the cost of Syariah-compliant financing, are at their highest level in 18 months relative to two-year securities, according to data compiled by Bloomberg. And with the slide in Brent crude prices sapping Malaysia's oil export revenue against a backdrop of looming US interest rate increases, investors say longer-term borrowing won't be getting cheaper anytime soon.