Bond Market in Malaysia

The bond market (also known as the debt, credit, or fixed income market) is a financial market where participants buy and sell debt securities, usually in the form of bonds.As of 2006, the size of the:

international bond market is an estimated USD 45 trillion.Malaysian bond markThe bond market provide another avenue for governments or corporations to raise capital.Essentially, bonds are debts or loans and when a bond is issued,t means the issuer (government or corporation) is borrowing a specified amount of money from the investor for a specified period of time.et is an estimated RM 75.8 (USDa bond is a debt security,n which the authorized issuer owes the holders a debt and is obliged to repay the principal and interest (the coupon) at a later date, termed maturity. financial contracts that pledge to repay a specified or fixed amount of money, with interest paid to the lenders upon maturity of the contractPurpose to raise short and long term funding for their business and development activities.Government Bonds issued are basically "risk free" The risk of default is fully guaranteed by the Government known as Malaysian Government Securities (MGS).Bonds issued by private entities or companies: Purpose to help finance their ongoing business activities. an alternative instrument to issue of equity or preference shares. to increase of financial leverage (used borrowed funds to improve its return on investment an incentive of tax deductible (helps to reduce the amount of tax on the company profits).Bonds issued by private entities or companies consist of debentures, secured (mortgaged) bond) and convertible bonds:-Debenture. usually unsecured in the sense that there are no liens or pledges on specific assets. it is however, secured by all properties not otherwise pledged. In the case of bankruptcy debenture holders are considered general creditors.

The advantage of debentures to the issuer is they leave specific assets burden free, and thereby leave them open for subsequent financing,an alternative instrument to issue of equity or preference