FTGSC to pay 0.032 sen income distribution for sukuk fund

KUALA LUMPUR: Franklin Templeton GSC Asset Management Sdn Bhd (FTGSC) has declared total income distribution of 0.032 sen per unit for the Franklin Malaysia Sukuk Fund as at Dec 31, 2016.

In a statement yesterday, FTGSC said, the fund recorded 5.67 per cent gross return with dividend reinvested since it was launched on Nov 18, 2015.

“The fund did well in 2016 and achieved its objective in providing regular income and capital gains to retail investors despite a challenging macroeconomic environment year marked by several shifts in market sentiment, notably towards emerging markets,” said Head of Malaysia Fixed Income and Sukuk, Hanifah Hashim.

She said the investment team’s strategy to remain fully invested in ringgit- denominated corporate Sukuk for yield pick- up and actively- traded sovereign Sukuk, contributed to the fund’s success.

“The recent spike in bond yields has reached an oversold level, especially after the US presidential election.

“Yields are stabilising since the market players started to re-build their positions as they enter 2017,” she said.

However, she said, volatility was expected to persist this year, driven by external factors such as uncertainty towards President Trump’s fiscal and monetary policies and rising political risks in Europe.

Hanifah expected Bank Negara Malaysia to maintain the overnight policy rate level in 2017, due to global low growth environment and weak ringgit.

However, there were bright spots for sukuk despite low growth environment, as the asset class is growing in popularity both locally and globally, in terms of demand and issuances, she said.

“Thus, the supply pipeline for sukuk in 2017 remains strong, led by the financial services, infrastructure and utilities sectors, providing more investment opportunities for the fund to tap into,” she said. — Bernama