Oil-squeezed Malaysia seen selling sukuk as US$1.2b debt matures

Kuala Lumpur

MALAYSIA will face pressure to sell global sukuk next year as US$1.2 billion of Islamic debt matures in July and plunging oil prices erode fiscal revenue and currency reserves.

RHB Investment Bank Bhd and Union Investment Privatfonds GmbH see demand for a new Islamic bond holding up because of a scarcity of dollar sukuk and longer-term prospects for Malaysia's finances.

The ringgit has rebounded 1.5 per cent this quarter, paring its losses to 19 per cent for 2015, a year in which reserves slid below US$100 billion for the first time since 2010.

Prime Minister Najib Razak repeated a warning last week that government revenue for Asia's only major net oil exporter could fall short of the official target by the equivalent of about US$7 billion next year. The yield on the sovereign US …