KUALA LUMPUR, March 11 (Xinhua) -- Fitch Ratings said Tuesday the war in the Middle East has had a limited direct impact on Malaysia's debt capital market (DCM), given largely domestic issuers and investors.
The rating agency said in a statement that fiscal consolidation should keep Malaysia's sovereign issuance flat, but non-sovereign funding needs and implementation of the Capital Market Masterplan 2026-2030 will drive supply.
It also foresees that Malaysia's DCM will grow modestly in 2026.
The conflict in the Middle East has had a limited direct DCM impact given the largely domestic issuer-investor base. At the end of 2025, foreign holdings of Malaysian government debt stood at 21.6 percent, said Bashar Al Natoor, Fitch's global head of Islamic finance.
"Fitch rates over 14 billion U.S. dollars of Malaysian sukuk, all investment grade, with all issuers on stable outlooks and no defaults over the past four years. Malaysia remains one of the world's largest sukuk markets, supported by a deep Islamic finance ecosystem and robust demand," he added.
It is noted that Malaysia's DCM is the third largest in ASEAN. It grew by 7 percent to over 600 billion dollars by the end of February 2026. ■
