Commentary Of The Week
Over the week, the Thomson Reuters BPAM All Bond Index registered a gain of 0.441 per cent to close at 155.212 points from 154.53 points recorded last week, underpinned by strong rally in the MGS segment.
MGS yields eased by two to 26bps across the board. Foreign demand for Malaysian bonds picked up as the ringgit continued to strengthen from 4.1640 against the US dollar last Friday to 4.1168 this week, following the release of robust Malaysia’s third quarter GDP data last week which signaled possibilities of a rate hike next year.
On November 22, 2017, Bank Negara Malaysia (BNM) reported that the international reserves amounted to US$101.5 billion as at November 15, 2017.
The reserves position is sufficient to finance 7.5 months of retained imports and is 1.1 times the short-term external debt. On November 24, 2017, Department of Statistics Malaysia published the Consumer Price Index (CPI) for the month of October, which increased 3.7 per cent from a year ago.
Among the major groups which recorded increases were the indices for Transport (12.1 per cent), Food & Non- Alcoholic Beverages ( 4.4 per cent), Restaurants and Hotels (+2.7 per cent), Furnishings, Household Equipment & Routine Household Maintenance (2.6 per cent), Health (2.4 per cent) and Housing, Water, Electricity, Gas & Other Fuels (2.4 per cent).
The trade volume of the top 10 most active bonds rebounded to RM13.8 billion this week compared to RM8.9 billion last week.
For the third consecutive week, the short term MGS maturing on March 1, 2018 topped the list with RM2.5 billion changed hands.
On November 20, 2017, BNM announced the tender details for the re-opening of the RM2.0 billion 15-year benchmark MGS maturing on April 15, 2033, with another RM1.0 billion privately placed. The tender closed on November 22, 2017 with a strong bid-to-cover ratio of 3.811 times.
The highest, average and lowest yield came in at 4.563, 4.55 and 4.532 per cent respectively.
On November 24, 2017, BNM announced the tender details for the re-opening of the RM3 billion five-year benchmark MGII maturing on April 14, 2022.
The tender will be closed on November 28, 2017 and reopened on the following day. On November 20, 2017, Alpha Circle Sdn Bhd issued a RM45 million one-year Islamic Medium Term Notes (IMTN) with a profit rate of five per cent.
The IMTN is rated AA-IS with stable outlook by MARC. Puncak Wangi Sdn Bhd issued a RM155 million two-year IMTN with a profit rate of 4.5 per cent.
The IMTN is guaranteed by Danajamin Nasional Bhd and is rated AAA(FG) with stable outlook by RAM Ratings.
On November 23, 2017, Gamuda Bhd issued a RM500 million fiveyear IMTN with a profit rate of 4.825 per cent.
The IMTN is rated AA3 with stable outlook by RAM Ratings.
On November 24, 2017, MARC revised its rating outlook for Sunway Bhd’s RM2 billion seven-year Commercial Papers/ Medium-Term Notes (CP/MTN) ProgrammeandSunwayTreasury Sukuk Sdn Bhd’s RM2 billion seven-year Islamic Commercial Papers/Islamic Medium-Term Notes (ICP/IMTN) Programme from Stable to Positive and concurrently affirmed their ratings at AA- and AA-IS(cg) respectively.
Sunway Bhd provided a corporate guarantee to the latter’s sukuk programme.