Malaysian Bond Market

Local govvies largely witnessed subdued trading activities this week as market players took to the sidelines in anticipation of Malaysia June CPI and lack of fresh catalyst with regards to US-China trade tensions.

While the market reacted with strong buying interest after the June CPI, bidding momentum was shortlived as profit takers emerged on the back of the ringgit weakness.

As at yesterday noon, the 3-, 5-, 7-, 10-, 15-, 20- and 30-year benchmark Malaysian Government Securities settled at 3.58%, 3.78%, 3.98%, 4.09%, 4.56%, 4.80% and 4.91%.

Trading activities for the benchmark local govvies’ slowed down to RM6.8bil from last week’s RM10.6bil.

Meanwhile, trading activities in the secondary corporate bond market improved from last week, with total trading volume increasing to RM2.7bil versus last week’s RM1.7bil.

Some 63% of the trading volume was from GG/AAA with 33% from the AA segment and the remaining 4% from the A segment.

In the GG/AAA segment, notable trades include 2022–2041 Prasarana Malaysia Bhd tranches, which closed with mixed yields between 4.21% and 5.04% and a total trading volume of RM400mil.

Besides, 2024-2047 DanaInfra Nasional Bhd tranches registered mixed yields of between 4.23% and 5.15% with RM320mil changing hands.

Furthermore, interest was seen in 2020-2026 Pengurusan Air SPV Bhd bonds, which closed with yields mixed between 4.02% and 4.35%, and RM185mil traded.

Meanwhile, ‘05/25 and ‘07/31 Jambatan Kedua Sdn Bhd bonds ended with yields mixed between 4.35% and 4.73% and a volume of RM120mil.

Elsewhere in the AA segment, notable trades were seen in the 20212032 Sarawak Energy Bhd tranches, which recorded a trading volume of RM150mil with yields closing mixed between 4.45% and 5.19%.

Furthermore, ‘09/18 Malayan Banking Bhd bond posted a trading volume of RM141mil and closed with yields 12 bps lower at 4.09%.

There was some interest in 20232035 Southern Power Generation Sdn Bhd tranches, settling with yields mixed between 4.67% and 5.34%, recording a total trading volume of RM100mil.

In addition, 2018-2022 Public Bank Bhd tranches registered yields mixed between 4.12% and 4.68% with RM95mil changing hands.