Malaysian Bond Market

The local govvies’ experienced a seesaw ride with yields largely slipping across the curve save for the five-year MGS. Amid the Workers Day holiday and FOMC meeting, market players derisk as they await clues on the pace of rate hike cycle.

The local bond space regained momentum after the FOMC meeting ended as flows were seen across the curve.

Meanwhile, Bank Negara also held a new issue auction for the 15-year MGS 04/33 with an issue size of RM3bil. The auction garnered a strong BTC of 2.722x, ranging between 4.620% and 4.653%, while averaging at 4.642%.

At Friday’s noon pricing, the 3-, 5-, 7-, 10-, 15-, 20- and 30-year benchmark MGS yields settled at 3.65%, 3.79%, 3.93%, 4.11%, 4.65%, 4.96% and 4.92% respectively.

Trading activities for the benchmark local govvies’ eased compared to last week. For the week, trading volume stood at RM7.6bil from RM12.4bil the week before.

Meanwhile, trading activities in the secondary corporate bond market continued to soften as week to date, with total trading volume slowing down to RM0.8bil versus last week’s RM1.2bil.

Some 29% of the trading volume was from GG/AAA with 65% from the AA segment and the remaining 6% from the A segment.

In the GG/AAA segment, notable trades included 2018-2020 Cagamas Bhd tranches which closed with mixed yields between 3.89% and 4.41% with a total trading volume of RM35mil.

Besides, ‘06/22 Genting Capital Bhd bond registered with yields largely unchanged at 4.70% with RM20mil changing hands.

Furthermore, interest was seen in the ‘02/26 Pengurusan Air SPV Bhd bond which closed with yields 7bps higher at 4.50%, with RM20mil traded. Meanwhile, ‘05/26 Putrajaya Holdings Sdn Bhd bonds closed with yields higher by 7bps at 4.64% with a trading volume of RM20mil.

Elsewhere in the AA segment, notable trades were seen in the energy sector with 2021-2027 YTL Power International Bhd tranches posting a trading volume of RM80mil and closed with yields higher between 4.54% and 5.35%.

Also from the energy sector, 20272030 Southern Power Generation Sdn Bhd tranches recorded a trading volume of RM80mil with higher yields between 4.90% and 5.06%.

Furthermore, there was some interest garnered in the banking sector with ‘09/18 CIMB Bank Bhd bond closing with yields lower by 37bps to 4.40% , and a trading volume of RM50mil.

In addition, ‘05/18 and ‘10/18 Perbadanan Kemajuan Negeri Selangor bond registered higher yields by 11bps to 4.20% and 13bps to 4.41% respectively, with RM30mil changing hands.