Complete Guide to Fixed Income Investing in Malaysia

Malaysia's fixed income market is one of the most developed in Asia, with a market size equivalent to almost the nation's entire GDP, making it the third-largest in Asia after Japan and South Korea. As of December 2023, the domestic bond market was valued at RM2.0 trillion, representing 52.6% of Malaysia's RM3.8 trillion overall capital market. 

Malaysia stands out regionally with the largest bond market in Southeast Asia, offering investors a diverse range of fixed income instruments with varying risk-return profiles, tenures, and structures. This comprehensive guide explores the various fixed income investment options available to investors in Malaysia, from government securities to corporate bonds, Islamic instruments, and more.

What is Fixed Income?

Fixed income refers to a type of investment that provides regular interest payments over a set period of time. When the investment reaches its maturity date, the investor also receives back the original amount of money that was invested—this is known as the principal. These investments are called “fixed income” because they typically offer predictable, steady returns, making them a popular choice for individuals who prefer stability and lower risk.

In Malaysia, fixed-income investments are generally grouped into two main categories: public debt securities and private debt securities.

Public debt securities are issued by the Malaysian government and are considered very low risk. These instruments like Malaysian Government Securities (MGS), Malaysian Government Investment Issues (MGII), Malaysian Treasury Bills (MTB), and Malaysian Islamic Treasury Bill (MITB). As they are backed by the government, they are often used by investors who want a safe and stable investment option.

On the other hand, private debt securities are issued by companies or financial institutions in the private sector. These include corporate bonds, notes, and sukuk (Islamic bonds). While these may carry slightly more risk compared to government-backed securities, they also tend to offer higher returns, depending on the financial strength of the issuer.

Fixed income investments are an essential part of a balanced portfolio. They can help protect your capital, generate steady income, and reduce the overall risk of your investments. However, it’s important to keep in mind that fixed-income products are not completely risk-free. Factors such as rising interest rates, or a default by the issuer can affect your returns.

Whether you’re saving for retirement, planning for your children’s education, or simply looking to grow your wealth with less risk, fixed-income investing can be a smart and reliable option to consider.

How does Fixed Income Work?

Fixed income investing operates on a simple concept: you lend your money to a borrower—usually a government or a company—and in return, you receive regular interest payments until your money is paid back at maturity.

When you purchase a fixed-income security, such as a bond or sukuk, you are essentially acting as a lender. The issuer uses your money to fund its activities, and in exchange, agrees to pay you a fixed amount of interest, known as a coupon, at regular intervals—monthly, quarterly, or annually. Once the security reaches its maturity date, the issuer repays your original investment, also known as the principal.

Here’s a simple example to illustrate:

Suppose a Malaysian company issues a 5-year bond with a face value of RM 1,000 and an annual interest rate of 5%. As an investor, you’ll receive RM 50 in interest payments each year for five years. When the bond matures, you’ll get back the RM 1,000 you initially invested.

Essentially, fixed-income investments generate returns mainly through interest payments and capital gains or losses. Interest payments, or coupon income, are the regular payouts received during the investment period, typically at a fixed rate. For Islamic instruments such as sukuk, returns are based on a profit-sharing model. Additionally, if the security is sold before maturity, its market value may have risen or fallen due to changes in interest or credit risk—resulting in a potential gain or loss.

Types of Fixed Income in Malaysia

Fixed-income securities play a crucial role in Malaysia’s capital market by offering investors a stable and predictable return while providing issuers—such as the government, government-linked companies (GLC), and corporations—a means to raise capital effectively. These instruments range from low-risk government bonds to high-yielding corporate debt, catering to a wide spectrum of investment appetites and risk tolerances.

As Malaysia continues to position itself as a regional financial hub, the variety and sophistication of fixed-income instruments have grown significantly. Understanding the different types of fixed-income securities in the Malaysian market is essential for investors seeking to build a balanced portfolio or for professionals navigating the country’s evolving financial landscape.

Public Debt Securities

Public debt securities in Malaysia are debt instruments issued by the federal government, Bank Negara Malaysia (BNM), or other government-linked entities. These instruments primarily serve to finance public spending, stimulate economic growth, and manage national debt and liquidity. Due to their government backing, they are generally regarded as low-risk investments and are a cornerstone for conservative portfolios and institutional investors seeking stable returns.

1. Malaysian Government Securities (MGS)

The MGS are the most prominent fixed-income instruments in the country. Introduced decades ago as part of Malaysia’s debt management strategy, MGSs are conventional (non-Islamic) bonds issued to finance long-term national development projects such as roads, schools, and utilities. They form the benchmark for the Malaysian bond market and are a key tool in fiscal and monetary operations. 

Type: Conventional fixed-rate bonds.

Purpose: Fund long-term development expenditures (e.g., infrastructure, healthcare, education).

Tenure: Typically 3 – 20 years.

Features:

• Pay semi-annual fixed coupons.
• Issued via competitive auctions by Bank Negara Malaysia (BNM).
• Coupon rates reflect weighted average yields of successful bids.
• Highly liquid and actively traded in the secondary market.
• Typically invested by local and foreign institutional investors, banks, pension funds, and insurance companies.

2. Malaysian Government Investment Issues (MGII)

To cater to the growing demand for Shariah-compliant investment products, the Malaysian government introduced MGII. These are the Islamic counterparts of MGS and are structured based on Islamic principles such as Murabahah (cost-plus financing) and Ijarah (leasing). MGII supports both national development and the positioning of Malaysia as a global leader in Islamic finance.

Type: Islamic bonds (Sukuk).

Purpose: Fund government development expenditure in compliance with Shariah principles.

Tenure: 3 – 15 years.

Features:

• Based on the Murabahah concept (cost-plus-profit sale of commodities like crude palm oil) and Ijarah (leasing) structures.
• Profit payments are made on a semi-annual basis, with rates determined by auction yields.
• Does not involve interest (riba), ensuring full compliance with Islamic finance principles.

3. Malaysian Treasury Bills (MTB)

The MTB are short-term conventional debt instruments issued by the Government of Malaysia to manage liquidity and finance short-term funding needs, such as covering temporary cash flow gaps in the national budget. These zero-coupon securities are sold at discount and redeemed at face value upon maturity, making them attractive for investors seeking a secure and predictable return over a brief investment horizon. Facilitated by BNM, MBTs are regularly issued and actively traded, offering flexibility for financial institutions and investors looking to park surplus cash.

Type: Short-term conventional securities.

Purpose: Manage liquidity and short-term government funding needs.

Tenure: 3–12 months.

Features:

• Zero-coupon instruments sold at a discount to face value.
• Issued via auctions; returns reflect the difference between purchase price and maturity value.
• Actively traded in the secondary market. 
• Tradable on a yield basis, grouped into bands by remaining maturity (e.g., Band 4 = 68–91 days)

4. MGS Floating Rate Securities (MGS-FRS)

The MGS-FRS are a variation of the Malaysian Government Securities that offer variable interest payments instead of fixed coupons. These bonds are designed to help investors hedge against interest rate volatility, as the coupon payments adjust periodically in line with market benchmark rates, such as BNM’s policy rate. MGS-FRS are particularly attractive during periods of rising interest rates, providing more stable returns compared to fixed-rate instruments.

Type: Conventional bonds with variable coupons.

Purpose: Hedge against interest rate volatility.

Tenure: Coupon resets are usually made every 3 or 6 months, depending on the issuance terms.

Features:

• Coupon rates adjust periodically based on a benchmark (e.g., BNM policy rate + spread).
• Auctioned and traded in the secondary market.

Private Debt Securities

Private debt instruments are issued by corporations or private institutions to raise capital for business operations, investments, or project funding. These securities typically carry higher risk compared to public debt securities, as they are subject to the credit risk of the issuer. However, they offer potentially higher returns, making them attractive to investors looking for greater yield opportunities.

1. Corporate Bonds

Corporate bonds are debt securities issued by corporations to raise funds for various purposes such as business expansion, acquisitions, or refinancing. Investors who purchase corporate bonds are lending money to the corporation and, in return, receive periodic interest payments (coupons) along with the return of the principal upon maturity. These bonds can either be conventional or Islamic (sukuk), depending on the structure.

Type: Conventional or Islamic (sukuk).

Purpose: To finance business expansion, acquisitions, or refinancing of existing debt.

Tenure: 5 – 30 years.

Features:

• Fixed / floating coupons (conventional) or profit rates (sukuk).
• Issued by listed / non-listed companies via private placements or public offerings.

2. Commercial Papers (CP)

Commercial papers (CP) are short-term debt instruments issued by corporations or financial institutions to fund their working capital requirements or meet short-term financial obligations. These debt instruments are often issued under a rolling issuance program, meaning they are continuously rolled over until the program's expiration.

Type: Short-term conventional or Islamic instruments.

Purpose: Fund working capital or short-term obligations.

Tenure: 1–12 months.

Features:

• Often issued as part of a rolling program where they are continually reissued to meet ongoing short-term needs.
• Traded at a discount to face value (conventional) or via profit-sharing (Islamic).
• Generally held to maturity, but also tradable in the secondary market.

3. Medium-Term Notes (MTN)

Medium-Term Notes (MTN) are debt instruments issued by corporations or financial institutions to raise capital for medium-term financing needs. They typically serve as a bridge between short-term commercial paper (CP) and long-term bonds. MTNs offer flexibility in terms of issuance structure and can be tailored to the specific needs of the issuer and investor, making them a popular choice in both conventional and Islamic finance.

Type: Conventional or Islamic.

Purpose: Bridge financing needs between short-term CP and long-term bonds.

Tenure: 1–10 years.

Features:

• Flexible issuance (fixed/floating rates, direct placements, or auctions). 
• Common in infrastructure and project financing.
• Issuers often use a debt program structure, allowing them to issue multiple MTNs over a specified period under one prospectus.

4. Investment Notes

Investment notes are debt instruments designed to raise capital for businesses. These instruments are available in both conventional and Islamic formats, offering opportunities for investors to fund small and medium-sized enterprises (SMEs) or other business financing needs such as invoice financing and working capital. Investment notes allow for shorter to medium-term investments and provide flexible repayment structures.

Type: Conventional or Islamic.

Platform: Issued via regulated peer-to-peer (P2P) platforms.

Purpose: Fund SMEs, invoice financing, or working capital.

Features:

• Short to medium-term (6 months–5 years).
• Repayment structures: Monthly/quarterly installments or bullet payments.

5. Asset-Backed Securities (ABS)

Asset-Backed Securities (ABS) are financial instruments that allow banks, corporations, or quasi-government entities to raise funds by converting illiquid assets into liquid securities. ABS are backed by pools of assets, such as mortgages, auto loans, credit card receivables, and business loans. The cash flows generated from these underlying assets are used to pay returns to investors. ABS are commonly issued in both conventional and Islamic forms, offering a versatile investment opportunity.

Type: Conventional or Islamic.

Purpose: Securitize assets (e.g., mortgages, auto loans, receivables), converting them into tradable securities..

Features:

• Cash flows tied to underlying assets.
• Common issuers: Banks, quasi-government entities, or corporations.
• Islamic ABS use structures like Sukuk Al-Ijarah (lease-backed).

Top private debt securities issuers in Malaysia

1. Cagamas Berhad

Type: National Mortgage Corporation

Backstory:

• Established in 1986 to develop the secondary mortgage market in Malaysia.
• Second-largest issuer of debt securities in Malaysia after the Malaysian government.
• AAA-rated, benefiting from a quasi-government backing—enhancing investor confidence and creditworthiness.

Main Offerings:

• Cagamas Bonds/Notes: Conventional fixed-income securities issued to finance the purchase of housing loans and receivables.
• Sanadat: Islamic sukuk issued based on Shariah-compliant structures to support Islamic financing transactions.
• Cagamas Papers: Short-term debt papers issued for liquidity management purposes.

2. Khazanah Nasional

Type: Sovereign Wealth Fund

Backstory:

• Established in 1993 as the strategic investment arm of the Malaysian government.
• Manages a diverse portfolio aimed at delivering sustainable risk-adjusted returns.
• As of December 31, 2024, the Investments Portfolio's Realisable Asset Value (RAV) stood at RM140.9 billion.

Main Offerings:

• Sukuk Ihsan – Malaysia’s first Sustainable and Responsible Investment (SRI) sukuk.
• Islamic Medium –Term Notes (IMTN).
• Green Sukuk – funds allocated to renewable energy, education, or social projects.

3. Bank Negara Malaysia (BNM)

Type: Central Bank

Backstory:

• Established in 1959, BNM is responsible for maintaining monetary and financial stability in Malaysia.​
• Manages the country's international reserves and issues currency.

Main Offerings:

• Bank Negara Monetary Notes (BNMN) – short-term liquidity instruments.
• BNM Islamic Monetary Instruments (BNMNi) – Shariah-compliant equivalents.
• Malaysia Treasury Bills (MTB) – although issued by the government, coordinated by BNM.

4. DanaInfra Nasional

Type: Government-Owned Entity

Backstory:

• Established to facilitate the funding of infrastructure projects in Malaysia, notably the Klang Valley Mass Rapid Transit (MRT) project.
• Pioneered the issuance of Exchange-Traded Bonds and Sukuk (ETBS) in Malaysia, making fixed-income securities accessible to retail investors.

Main Offerings:

• Retail Sukuk (ETBS) – exchange-traded bonds/sukuk on Bursa Malaysia.
• Islamic Medium-Term Notes (IMTN) – institutional funding.
• Sukuk Wakalah – common Shariah structure used.

5. Maybank Investment Bank

Type: Investment Banking Arm of Malayan Banking Berhad (Maybank)

Backstory:

• Offers a comprehensive suite of investment banking services, including advisory, financing, and trading solutions.​
• Serves a diverse clientele, ranging from corporations and institutions to high-net-worth individuals.

Main Offerings:

• Structured corporate bonds and Islamic sukuk.
• Customizable private debt securities (PDS), Certificate Papers (CPs), and medium-term notes (MTNs) for corporate clients.
• Green/sustainable sukuk advisory and structuring.

6. Project Lebuhraya Usahasama

Type: Infrastructure/Highway Operator

Backstory:

• Malaysia's largest expressway concessionaire, responsible for the operation and maintenance of major highways.​
• Issuer of large-scale sukuk for expressway development and refinancing.
• Benefits from stable cash flow from toll revenue.

Main Offerings:

• Sukuk Musharakah/Murabahah – long-tenure Islamic bonds.
• Islamic MTNs – structured for refinancing highway projects.

7. Tenaga Nasional Berhad (TNB)

Type: Electric Utility Company

Backstory:

• The largest electricity utility in Malaysia, responsible for generating, transmitting, and distributing electricity nationwide.
• Government-linked company with long-standing creditworthiness.
• Uses sukuk and bonds to finance energy infrastructure and green projects.

Main Offerings:

• Sukuk Wakalah – structured under Islamic principles.
• Sustainable and Green Sukuk – tied to energy efficiency and renewable projects.
• Long-term corporate bonds for capital expenditure.

8. Sime Darby Berhad

Type: Conglomerate (Plantation, Industrial, Logistics)

Backstory:

• Issues bonds/sukuk to fund its various business divisions and ESG initiatives.
• Credit-rated and has strong investor confidence due to GLC links.

Main Offerings:

• Corporate Sukuk (e.g., based on Ijarah or Murabahah structures).
• Medium-Term Notes (MTNs) – typically used for capex and expansion.

9. Petronas

Type: National Oil & Gas Company

Backstory:

• One of the most creditworthy state-owned enterprises (SOEs) in Asia.
• Globally recognized for issuing landmark international and domestic sukuk.

Main Offerings:

• Global Sukuk – in USD and MYR denominations.
• Petronas Islamic MTNs – funding domestic infrastructure and expansion.
• Sustainable Sukuk – recent issues tied to ESG/renewable goals.

10. Capbay

Type: Fintech / Peer-to-Peer (P2P) Lending Platform

Backstory:

• Specializes in invoice financing and supply chain finance for SMEs.
• Democratizes fixed-income investment for retail and institutional investors.

Main Offerings:

• Investment Notes (Conventional and Islamic).
• Short to medium-term financing notes for working capital.
• Returns structured as fixed monthly/quarterly repayments.

11. Kenanga Investors Bhd

Type: Fund Management Company

Backstory:

• Subsidiary of Kenanga Investment Bank.
• Offers a wide array of fixed-income unit trusts and wholesale funds.
• Focus on capital preservation and consistent income for investors.

Main Offerings:

• Bond and Sukuk Unit Trusts.
• ESG Fixed-Income Funds.
• Custom Private Mandates and Wholesale Funds in fixed income.

12. Funding Societies Malaysia

Type: Fintech / P2P Lending Platform

Backstory:

• Founded with the mission to address the SME financing gap in Southeast Asia, providing financial opportunities for both SMEs and investors.
• Participated in the Malaysia Co-Investment Fund (MyCIF) program, collectively co-investing over RM 540 million, benefiting at least 3,500 micro, small, and medium enterprises (MSMEs).

Main Offerings:

• Investment Notes with tenures from 1 to 12 months.
• Invoice Financing Notes and Microloans.
• Shariah-compliant Islamic investment notes available.

What are fixed income credit ratings

Fixed income credit ratings are assessments provided by independent agencies to evaluate the creditworthiness of bond issuers, such as corporations, municipalities, and governments. These ratings indicate the issuer’s ability to meet its debt obligations, such as making interest payments and repaying the principal upon maturity. Fixed income ratings help investors assess the relative risk associated with different bonds, ensuring they make informed decisions when investing in the bond market.

Importance of Fixed Income Credit Ratings

1. Investor decision-making

Credit ratings offer a valuable tool for investors to evaluate the risk of fixed income investment. A higher credit rating typically indicates a lower risk of default, which is crucial for risk-averse investors. Conversely, a lower credit rating suggests a high risk of default, which may lead to higher returns to compensate for that risk.

2. Market liquidity and demand

Bonds with high credit ratings tend to attract more investors, including institutional investors, due to their perceived lower risk. This can enhance liquidity, meaning such bonds are more easily traded in the market. On the other hand, lower-rated bonds might have fewer buyers and could face greater price volatility.

3. Interest rate impact

The credit rating of an issuer directly impacts the interest rate they must offer to attract investors. Higher-rated bonds (investment-grade) generally have lower yields because they are considered safer investments, whereas lower-rate (high-yield or junk) bonds must offer higher returns to compensate for the added risk of default.

4. Regulatory and compliance purpose

Certain institutional investors, such as pension funds and insurance companies, may be restricted from purchasing bonds that fall below a certain credit rating. For example, many institutional investors are prohibited from investing in bonds rated below BBB- (Standard & Poor’s rating scale), considering these bonds too risky.

5. Economic indicators

Fixed income ratings serve as economic indicators for both the issuer and the broader market. A downgrade can signal potential financial troubles, while an upgrade may indicate a stronger financial position, improving the issuer’s access to the capital market and potentially lowering their borrowing costs.

What is a Credit Rating Agency?

A credit rating agency is an independent organization that evaluates and assigns credit ratings to bond issuers and their debt securities. These agencies assess the issuer’s ability to repay debt, based on factors such as the financial health of the issuer, economic conditions, and industry performance.

Credit rating agencies play a crucial role in the global financial system by offering objective and consistent assessments of creditworthiness, allowing investors to make informed decisions and manage their investment portfolios effectively. The most prominent credit rating agencies are Moody’s, Standard & Poor (S&P), and Fitch Ratings, each with its own grading system for credit ratings.

In Malaysia, credit rating activities are regulated by the Securities Commission Malaysia (SC). The two main domestic credit rating agencies are RAM Rating Services Berhad (RAM Ratings) and Malaysian Rating Corporation Berhad (MARC Ratings). These agencies provide credit assessments tailored to the Malaysian financial landscape and issue national-scale ratings, which reflect relative credit risk within Malaysia. Their evaluations serve as key references for investors, financial institutions, and regulators in the country.

How Credit Rating Agencies Work

1. Research and analysis

Credit rating agencies conduct comprehensive research on the issuer’s financial statements, market conditions, management quality, and other relevant factors. They analyze the issuer’s current and future ability to meet its debt obligations.

2. Rating assignment

Based on their findings, credit rating agencies assign a letter-based rating that reflects that issuer’s creditworthiness. These ratings range from AAA (highest quality) to D (in default), with various intermediate grades such as AA, A, BBB, and so on.

3. Ongoing monitoring

Credit ratings are not static. Agencies continuously monitor the financial health of the issuer and will adjust ratings accordingly. Downgrades typically indicate a worsening financial position, while upgrades signal improvement.

4. Credit rating scales

Different agencies use slightly different scales, but they share common characteristics:

• Investment grade: Ratings from AAA to BBB (S&P) or Aaa to Baa (Moody’s) are considered safe investments.
• Non-investment grade (Junk): Ratings below BBB- (or Baa3) indicate high risk, with the potential for higher returns.

Overall, the credit rating system helps facilitate transparency in the financial market, ensuring that bond investors have access to objective, standardized information when evaluating investment opportunities.

The different range of fixed income credit ratings

In Malaysia, Corporate Credit Ratings (CCR) provided by RAM Ratings reflect an independent opinion on a company’s general capacity to meet its financial obligations in a timely manner. Unlike issue-specific ratings, CCRs are not tied to the terms of a particular debt instrument. RAM Ratings provides both long-term and short-term national-scale credit ratings to help investors assess the creditworthiness of issuers operating within Malaysia’s financial ecosystem.

Long-term Ratings (Investment Grade & Non-Investment Grade)

Note: RAM Ratings applies numerical subscripts (1, 2 or 3) to ratings from AA to C to further refine the rating scale:

• 1: Higher end of the rating category
• 2: Mid-level ranking within the category
• 3: Lower end of the rating category

Short-Term Ratings

These credit ratings provide a clear benchmark for institutional and retail investors when evaluating the risk associated with investing in Malaysian corporate bonds or sukuk. Importantly, they help distinguish between investment-grade and non-investment-grade instruments, allowing for more informed portfolio construction and risk management decisions.

So, why should we invest in fixed income in Malaysia

In times of market volatility, it’s natural to feel anxious and uncertain about your investment strategy. Rather than reacting emotionally to short-term market swings, consider focusing on what you can control — your portfolio mix. Including fixed income investments in your portfolio can offer stability, reliable income, and help balance risk and return over time. Following are few reasons why you should invest in fixed income in Malaysia:

Capital preservation

Fixed income instruments such as bonds are known for their capital stability. Upon maturity, the principal is returned to the investors — making them suitable for those prioritizing capital preservation, especially during periods of volatility. This makes many fixed income securities, particularly government or government-guaranteed bonds, a key tool for meeting future financial needs with greater certainty.

Dependable income stream

Unlike equities that may or may not pay dividends, fixed income securities offer predictable income through regular coupon payment. These payments are typically made monthly, quarterly, semi-annually, or annually, depending on the bond. This predictability makes fixed income ideal for retirees or investors who rely on steady income.

Diversification from stock market risk

Fixed income assets are generally classified as defensive investments and have a low correlation with equities, helping to reduce portfolio volatility. When equity markets decline, fixed income may perform better, offering portfolio stability during economic downturns. Their known income flows provide less volatility compared to the uncertainties of stock dividends or property income.

A core component in a diversified portfolio

Fixed income solutions, when combined with equities and other assets, help form a well-balanced portfolio. Not all asset classes move together — and including bonds in the mix can help smooth out returns. This is crucial for long-term goals, especially for portfolios aligned with mildly conservative or moderate risk profiles.

Bonds vs. fixed deposits

While many Malaysians turn to fixed deposits (FDs) for safety, bonds often offer superior returns over similar tenures — and without early withdrawal penalties. With declining interest rates in recent years, FDs may no longer keep up with inflation. Fixed income investments may provide stable interest income, capital appreciation potential, and liquid flexibility, making them a compelling alternative.

Beyond traditional fixed income

While many bonds are more liquid than fixed deposits, they can still come with trade-offs — like price volatility if sold before maturity or minimum investment sizes. For investors seeking steady returns without complexity or lock-in periods, solutions like StashAway Simple™ offer a modern alternative. It provides access to diversified, low-risk money market funds with no lock-in and the ability to withdraw anytime — making it ideal for those balancing flexibility and financial growth.

Growing relevance for Malaysian investors

With Malaysia projected to become an ageing nation by 2030, there is a growing demand for income-producing investments to support retirement needs. BNM’s accommodative monetary policy such as reducing the Overnight Policy Rate (OPR) to stimulate economic growth, creates a favourable environment for local bond markets. In this context, local investors are encouraged to focus on quasi-sovereign and highly rated issuers, and consider professionally managed portfolios that are tailored to meet their long-term financial goals.

In summary, fixed income is a critical pillar of a sound investment strategy, it preserves capital, provides predictable income, reduces overall portfolio risk, and can deliver better returns than cash instruments in the long run. Whether you’re a conservative investor, preparing for retirement, or simply aiming for more stable returns, fixed income has an essential role to play. By diversifying wisely and focusing on your long-term objectives, you’ll be better positioned to ride out market turbulence and meet your financial goals with greater confidence.

Where and how to invest in fixed income in malaysia

Malaysia offers a variety of channels for both retail and institutional investors to access fixed income instruments, ranging from government bonds and sukuk to corporate debt and professionally managed funds. Below are the main avenues:

1. Exchange-Traded Bonds and Sukuk (ETBS) on Bursa Malaysia

What: ETBS are bonds and sukuk listed on the stock exchange and traded like shares. These instruments are backed by the government or government-linked entities.

Examples: DanaInfra Retail Sukuk, Government Investment Issues (GII), Malaysian Government Securities (MGS), and corporate sukuk.

Features:

• Accessible to retail investors with a minimum investment of RM 1,000.
• Real-time pricing and ease of trading through brokerage accounts.
• Investors can use Bursa Malaysia’s Bond Calculator to estimate yields and returns.

How to Invest:

• Open a CDS and brokerage account (e.g., Moomoo, Maybank Trade, Kenanga).
• Place orders during trading hours on Bursa Malaysia

2. Retail Bonds and Sukuk via Banks and Financial Platforms

What: Bonds and sukuk offered directly by financial institutions to retail or high-net-worth individuals (HNWIs).

Key Providers:

• Maybank: Offers MYR bonds (min. RM250,000) and USD bonds (min. USD100,000).
• OCBC Malaysia: Caters to HNWIs with local and foreign currency bonds.
• StashAway: Automated portfolios with fixed-income exposure.

Steps:

1. Open an account with a licensed distributor (e.g., Maybank, CIMB, UOB).
2. Submit risk profiling or investor suitability documentation.
3. Buy through bank branches, online banking platforms, or dedicated wealth advisors.

3. Fixed Income Unit Trusts and Mutual Funds

What: Professionally managed funds investing in a basket of bonds or sukuk, suitable for retail investors.

Options:

• ASN Sukuk (by PNB): A shariah-compliant fixed income fund with low entry barrier (min. Initial investment of RM 10).
• Kenanga Investors Bhd: Offers bespoke private credit strategies for HNWIs.
• CapBay: P2P platform offering supply chain financing with fixed-income-like returns (avg. net returns ~8.2%).

Features:

• Diversified exposure to government/corporate bonds.
• Lower entry barriers (min. RM100–RM1,000).

4. Over-the-Counter (OTC) Corporate Bonds Market

What: Bonds and sukuk issued by corporations or financial institutions directly traded between institutions and eligible investors.

Instruments: Corporate bonds, sukuk, MTNs.

Eligibility: Institutional investors or HNWIs (net worth ≥ RM 3M).

Platforms:

• Bond Pricing Agency Malaysia (BPAM): Offers daily bond pricing, data, and research.
• Bond Info Hub (BIX): Free bond/sukuk info platform by the Securities Commission (SC) Malaysia.

5. Sustainable and Responsible Investment (SRI) Sukuk

What: Islamic bonds used to fund green or socially responsible projects, aligned with ESG (Environmental, Social, Governance) principles.

Examples:

• TNB Green Sukuk: Supports clean energy initiatives.

Where:

• Bursa Malaysia (ETBS section) for listed SRI Sukuk.
• Via private placements through banks (e.g., Maybank, HSBC) for institutional offerings.

How to Invest: Step-by-Step Guide

Step 1: Choose Your Instrument

Table below highlights the key details of each fixed income investment instrument in Malaysia, including their risk levels, minimum investment requirements, potential returns and the types of investors for whom they are more suitable.

Step 2: Open an Account

Brokerage Accounts: Moomoo, Rakuten Trade, Maybank2u.

P2P Platforms: Funding Societies, CapBay (min. RM100).

Requirements:

• For retail investors: MyKad and proof of income.
• For NHWIs: RM 3M net worth declaration.

Step 3: Execute Your Investment

1. ETBS: Trade via Bursa Malaysia using your brokerage account.
2. OTC Bonds: Work with banks like Maybank or OCBC to access private placements.
3. Funds/ETFs: Buy through platforms like StashAway or PNB.

Step 4: Monitor and Manage

Tools:

• Bursa Bond Calculator (track yields/prices).
• BIX Platform (free bond/sukuk data).

Exit Options:

• Sell ETBS on Bursa Malaysia.
• Hold until maturity for principal repayment.

Final thoughts: Making fixed income works for you

Malaysia’s fixed income market offers something for every investor — from ultra-safe government bonds to high-yield private sukuk. Whether you're seeking capital preservation, passive income, or diversification, there’s a fixed income solution that fits your needs.

For those who want stability without the rigidity, modern alternatives like StashAway Simple™ give you access to market-rate returns with the flexibility to withdraw anytime — ideal for balancing liquidity with long-term growth. Ultimately, the best fixed income strategy is one that matches your goals, risk appetite, and time horizon. Build wisely, stay informed, and let your portfolio work steadily for you.