Malaysia to Conduct 16 Government Bond Sales in 2008

By David Yong

Dec. 21 (Bloomberg) — Malaysia will hold 16 government bond auctions next year to raise funds for development projects and to finance its budget deficit, the central bank said in a statement on its Web site.

The schedule includes auctions of debt due in three, five, 10 and 20 years, Bank Negara Malaysia said. The central bank, which conducts auctions on behalf of the finance ministry, doesn't disclose the exact amount or date of each sale until about a week in advance.

The government raised 53 billion ringgit ($15.8 billion) from 16 debt sales this year, 47 percent more than in 2006, and the most since the budget fell into a deficit during the Asian financial crisis of 1998.

The finance ministry in September forecast it would have a 20.9 billion ringgit shortfall in its budget for 2008, or about 3.1 percent of gross domestic product, the smallest proportion in a decade.

Malaysia's local-currency bonds have handed investors a gain of 3.6 percent this year, the lowest return among the Southeast Asian debt markets tracked by HSBC Holdings Plc. They returned 5.1 percent in 2006.