First exchange-traded bond fund in ASEAN

Associated Press

Kuala Lumpur, July 18:

Malaysia today launched its first bond fund on the stock exchange as part of an Asian scheme to augment underdeveloped capital markets. The exchange-traded fund is also the first of its kind in Southeast Asia and will allow retail investors access to a pool of government bonds for investment, said Yusli Yusoff, chief executive of the local exchange Bursa Malaysia. “Plans are in the pipeline to make more of such funds available to investors by the end of this year,” he said. The bond fund, which is part of the Asian Bond Fund 2 or ABF2 scheme, includes 10 Malaysian government bonds with maturities ranging from 2007 to 2013 and coupons varying between 7.28 and 3.65 per cent. AmInvestment Group is the fund’s manager and adviser.

“The fund’s listing is another major step forward in the development of the Malaysian bond market and to enhance further its potential to contribute to sustained and balanced growth of our economy,” said central bank governor Zeti Akhtar Aziz. She said Malaysia is the second of eight individual country funds under the ABF2 scheme. Hong Kong launched the first fund last month, and others that are expected to follow suit are China, Indonesia, Korea, the Philippines, Singapore and Thailand.