IslamicFinance.de

Malaysia’s second-largest pension fund plans to buy more bonds to hedge against another interest-rate cut as it moves further toward becoming a full-fledged Islamic entity. CEO of Kumpulan Wang Persaraan, Wan Kamaruzaman Wan Ahmad said the fund is considering lowering its 5% minimum return target because of the uncertainty in global markets. He also added that this low interest-rate environment, low corporate returns, lower dividend yields will prevail for a much longer period. KWAP bought 30-year Malaysian government bonds at a yield of 4.613% on June 29, days after the UK voted to leave the European Union. Wan Kamaruzaman said the fund will likely keep its 2% allocation to UK assets, despite the results of the referendum, because it adds diversification to the portfolio.

Malaysia's two biggest state-owned pension funds plan to boost holdings of dollar sukuk.
It is said that their increasing presence in the global arena will help strengthen Malaysia's position as a global Islamic hub and enhance the country's visibility. It will also encourage more local and international issuers to sell dollar sukuk in Kuala Lumpur and around the world.