An Analysis of Corporate Bonds Issuances in Malaysia

Abstract

The objective of this study is to reveal an evocative statistical result on the bonds issuances for both, conventional bonds and Islamic bonds in Malaysia. Secondary data are obtained from Bondinfo hub, central bank of Malaysia on long-term and medium-term issuances of corporate bonds. There is 256 and 405 number of observations for long-term and medium-term issuances respectively. The independent samples T-test and Levene's test are utilized for hypotheses testing. Results revealed that conventional bonds yields have larger spread compared to sukuk in long-term issuances. However in medium-term issuances, the spreading of risk is larger in sukuk compared to conventional bonds. To the issuer, sukuk issuances is the best option in long-term capital financing otherwise conventional bonds issuances is better for medium-term period since their commitment to pay contractual interest is low.