A government-linked sukuk has highly likely gone default, sources familiar with the issue had disclosed.
The sources today said, this could be the first government-linked Islamic bond to have gone default, since the 1997 Asian Financial Crisis.
The sources added, owners of the bond had requested to extend its deferred payments, after it lapsed on 31 December 2021.
But investors had rejected the request yesterday.
“First trading day of 2022 and a Malaysian Sukuk paper goes default. What does that tell investors?”
“This will affect Malaysia’s ratings, as foreign investors will start questioning the Malaysian government’s actions and sincerity.”
“Not forgetting how investors will view our economy.”
Another source from a financial institution said that market watchers are keeping a close eye on developments, as financial institutions invested in the sukuk are wary.
“Investors are keeping a close watch. Different institutions have different amount of exposure and it will certainly affect pur investments.”