Understanding Malaysian Bond Funds – part 1
Filed Under (Unit Trust) by Webmaster on 11-04-2009
Tagged Under : Bank Negara, bond funds, cagamas, malaysian treasury bills, monetary notes
This is an extract from an article that was published in BTimes that we think will be beneficial to Pro Trade Shares visitors.
What is a bond?
A bond is a debt security issued by an issuer (otherwise known as the borrower) to raise funds as an alternative to borrowing directly from banks. By “lending” money to bond issuers, buyers of bonds (or bondholders) are paid periodic interest returns called coupon payments.
Similar to loans, which carry fixed tenures, bonds too have fixed maturity dates for bondholderws to get back their principal.
Bond issuers could be domestic or foreign corporations, domestic or foreign state/federal governments and even central banks.
A. Government Bond
Issuer
Malaysian government (facilitated by Bank Negara)
Type of Bond
1. Malaysian Treasury Bills (MTB)
2. Malaysian Government Securities (MGS)
3. Government Investment Issues (GII)
4. Monetary Notes
Issuer
Bank Negara
Type of Bond
1. Bank Negara Monetary Notes (BNMN)
2. Bon Simpanan Merdeka
B. Corporate Bond
Issuer
Cagamas (national mortgage corporation that issues asset-backed securities)
Type of Bond
1. Cagamas notes
2. Cagamas bonds
3. Islamic Cagamas bonds
Issuer
Khazanah Nasional (investment holding arms of the Government of Malaysia)
Type of Bond
1. Khazanah Bonds
Issuer
Corporations (such as Tenaga Nasional and others)
Type of Bond
1. Commercial Papers
2. Medium Term Notes
3. Corporate Bonds/Private Debt Securities
[...] is part II of Understanding Bond Funds. You can view part I of understanding bond funds to find out what type of bond [...]