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Growth and Outlook of Asset-Backed Securitization in The Malaysian Capital Market: The Case Study of Sunway City Berhad

Norazlina Ripain (Universiti Tenaga Nasional)

Roslan Ali (Universiti Teknologi Mara)

Antoaneta Serguieva and Shafinar Ismail (Universiti Sains Islam Malaysia)

Abstract:

Asset-Backed Securitization (ABS) was introduced in Malaysia in 2001. This timely study overviews the structure of ABS in the Malaysian capital market, examines the securitization mechanism, and measures the growth and performance over the period from 2001 to 2005. The results reveal a robust growth in overall, with a significant increase of 200% in 2003. Furthermore, Islamic ABS was introduced in 2003, and their issuance size in 2005 was worth RM5.2 billion, thus surpassing the Conventional ABS with an issuance value of RM4.2 billion. We also consider company performance, specifically on the originator perspective, and focus on the commercial property sector. The results reveal that after securitizing their assets, the originators manage a reduction in debt obligations and an enhancement in earning capacities. The study concludes with the benefits that a transfer of knowledge on ABS can bring to organizational performance and to investors' portfolios. The authors believe that ABS shall become a premier alternative debt financing to companies and a portfolio diversification tool to investors in the Malaysian capital market.

Keywords: Securitisation mechanism, securities structure, conventional and Islamic ASB, debt, earnings

 

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JMIFR Vol.3 No.1 2006 - part 3.pdf

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