KOTA KINABALU, Oct 20 — SMJ Sdn Bhd (SMJSB), the Sabah state government-owned company, marks a significant victory as its inaugural issuance of RM900 million sukuk wakalah programme was oversubscribed by 3.9 times, with an order book of RM3.5 billion, from a diverse group of investors in Malaysia.

The overwhelming demand reflected the market’s confidence in SMJSB’s financial strength, business prospects and corporate governance, said the company in a joint statement with AmInvestment Bank Bhd (AIBB), the sole principal adviser and lead arranger for the programme.

"The sukuk wakalah, which has a tenor of between 5 and 15 years, was issued under the Shariah principle of wakalah and carries a profit rate of between 4.23 per cent and 4.67 per cent per annum,” SMJSB and AIBB said.

They said the first issuance was part of its AAA-rated multi-currency sukuk wakalah programme of up to RM10 billion in nominal value.

Besides AIBB, CIMB Investment Bank Bhd and Bank Pembangunan Malaysia Bhd were joint lead managers for the inaugural issuance.

According to the statement, the signing ceremony to mark the first issuance between SMJSB chief executive officer Dionysia Kibat and AIBB head of debts market Yeoh Teik Leng was held here today, witnessed by Sabah Chief Minister Datuk Seri Hajiji Noor.

Also present were Sabah Finance Minister Datuk Seri Masidi Manjun, who is also SMJSB chairman, Sabah state secretary Datuk Seri Safar Untong and AIBB chief executive officer Tracy Chen.

Speaking to reporters after the event, Masidi said the incredible achievement proves that Sabah is on a clear upward trajectory and has the strong support of the financial investment community.

He said by upholding best practices, corporate governance principles and sound financial management, Sabah is definitely an attractive investment destination for the future.

"We have just launched the sukuk issuance, and this is (meant for) the business needs of SMJSB, a wholly owned company of the state government created after a commercial collaboration agreement with Petroliam Nasional Bhd (in December 2021) to drive the growth of the oil and gas industry in Sabah.

"I am proud that even though it is a new company, the (sukuk) issuance has been well received (as) it has been oversubscribed by almost four times,” he said.

Masidi noted the response indicated the full confidence of the financial sector in both SMJSB and the state government, as well as a reflection on AIBB’s ability to manage the sukuk issuance well.

He said the sukuk programme is crucial for SMJSB as a financial instrument, enabling the company to obtain the necessary capital to fulfil its business purposes, including acquiring assets.

"Among the efforts mentioned earlier include the acquisition of Sabah International Petroleum Sdn Bhd and various assets with the potential to bring better returns for this company and the state government,” he added. — Bernama