Malaysian Bond Market

Local govvies yield curve rose this week amid the global bond selloff while investors were cautious ahead of Bank Negara’s monetary policy meeting on Thursday.

At Friday’s 11am pricing, the 3-, 5-, 7-, 10-, 15-, 20- and 30-year benchmark Malaysia Government Securities (MGS) yields settled at 3.39%, 3.74%, 3.94%, 3.98%, 4.46%, 4.61% and 4.80% respectively.

Trading activities eased this week compared to the previous week where benchmark local govvies registered a trading volume of RM7.8bil compared to the previous week’s value of RM8.9bil.

The secondary corporate bonds market also recorded more trading activities compared to last week. Week to date, total trading volume was lower at RM600mil compared to last week’s RM1.41bil. About 36% of the trading volume was contributed by the GG/ AAA, 58% by the AA segment and the remaining 6% by the A segment.

In the GG/AAA segment, notable trades included ‘12/17 Cagamas MBS bond whereby yields closed 12 basis points (bps) higher at 3.75% with RM60mil changing hands. There was also interest in the ports sector where Pelabuhan Tanjung Pelepas bond maturing ‘09/20 saw yields close higher at 4.05% with a trading volume of RM30mil.

Also having garnered some interest was ‘01/30 TNB Western Energy bond, which recorded a trading volume of RM30mil with yields 7 bps lower at 4.81%. Meanwhile, Cagamas tranches maturing 2018-2024 traded at mixed yields of 3.86%-4.36% respectively, with RM30mil changing hands

Elsewhere in the AA segment, notable trades included 2020-2027 MMC Corp tranches, which recorded a total trading volume of RM90mil with yields higher at 4.91%-5.43%.

Also garnering interest this week was 2019-2023 UEM Sunrise tranches, which recorded a collective trading volume of RM60mil where yields traded unchanged or lower at 4.49%-4.81%.

Meanwhile, ‘02/21 and ‘10/21 UMW Holdings bonds traded at lower yields of 4.69% and 4.75%, respectively, with a collective trading volume of RM40mil.

Tanjung Bin Energy Issuer bonds maturing ‘09/30 and ‘03/31 recorded mixed yields at 5.04% and 5.07%, respectively, with RM20mil changing hands.