89
Since the GoM’s inaugural GII issuance in July 1983, the paper has been predominantly held by
domestic investors. As at end-June 2017, approximately 43% of GII was held by banking and
development financial institutions, 38% by institutional funds and another 9% by foreign
investors (refer to Chart 4.11).
As at end-2016, the bulk of MGS issues were held by foreign investors (47%), followed by
institutional investors (22%) and banking and development financial institutions (17%) (refer
to Chart 4.12). Since credit is agnostic as to whether it is Islamic or conventional, the disparity
between holders of GII and MGS points to foreign investors’ familiarity with conventional
documentation for MGS. In the last 2 years, the visibility arising from the incorporation of
Malaysia’s GII into the Barclays Global Aggregate Index in March 2015 and the inclusion of the
USD-denominated Malaysian sukuk in the EMBI Global Diversified Index in October 2016 have
helped enhance the marketability of the GoM’s Islamic debt securities to foreign investors. In
hindsight, the GoM should have included GII in recognised indexes much earlier, to promote its
marketability among international investors.
Chart 4.11: GII Issued Domestically – Classification by Holder (2008-2016)
2015– IncorporationofGII into
Barclay’s Global AggregateIndex
43%
38%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2008 2009 2010 2011 2012 2013 2014 2015 2016
Other Insurance companies
Employees Provident Fund + KWAP Foreign holders
Banking institutions + Development financial institutions
2015– IncorporationofGII into
Barclay’s Global AggregateIndex
9%
Source: BNM