Malaysian Bond Market

Local govvies yield curve fell this week amid the drop in global bond yields after weak US and UK inflation data. Lower yields were also driven by the slowdown of Malaysia’s inflation in June. At Friday’s 11am pricing, the 3,5, 7, 10, 15, 20 and 30year benchmark MGS yields settled at 3.35%, 3.69%, 3.89%, 3.95%, 4.39%, 4.55% and 4.80% respectively. Trading activities rose this week compared to the previous week where benchmark local govvies registered a trading volume of RM8.5bil compared to the previous week’s value of RM7.8bil. The secondary corporate bonds market also recorded more trading activities compared to last week.

Week to date, total trading volume was higher at RM1.84bil compared to last week’s RM0.6bil. About 41% of the trading volume was contributed by the GG/AAA, 52% by the segment and the remaining 7% by the A segment. In the GG/A segment, there was interest in the toll road sector where notable trades included 2020 2036 Projek Lebuhraya Usahasama tranches whereby yields closed mixed at 4.10%5.17% with RM240mil changing hands.

There was also interest in the transport sector where Prasarana Malaysia tranches maturing 20222024 saw yields close mixed at 4.08%-4.25% with a trading volume of RM155mil. Also having garnered some interest was ‘04/22 Aman sukuk which recorded a trading volume of RM50mil with yields 4bps higher at 4.34%.

Meanwhile, ADCB Finance (Cayman) bond maturing ‘11/17 traded at 3bps lower yields of 4.20% with RM30mil changing hands Elsewhere in the segment, notable trades included 20192026 BGSM Management tranches which recorded a total trading volume of RM120mil with yields unchanged or higher at 4.48% 4.99%.

Also garnering interest this week was 2020 2035 SPR Energy tranches which recorded a collective trading volume of RM95mil where yields traded unchanged at 4.64%5.95%.

Meanwhile, ‘08/35 and ‘08/36 Lebuhraya Duke Fasa 3 bonds traded at higher yields of 5.23% and 5.29%, respectively, with a collective trading volume of RM80mil. IJM Corp bonds maturing ‘04/21 and ‘06/22 recorded higher yields at 4.42% and 4.50%, respectively, with RM71mil changing hands.