Malaysian Bond Market

The local bond market began the week in lacklustre mode as market players largely took to the sidelines amid flaring US-China trade tensions while anticipating the FOMC meeting mid-week.

Flows were tepid in the secondary bond space up till the FOMC statement release. Post-FOMC, the dovish tone in the Fed’s statement fuelled risk appetite among investors as strong bid flows were seen across benchmarks; especially at the 10-year tenure bucket.

Bank Negara also held a new-issue auction for the 3-year Government Investment Issue 03/22, which garnered a strong bid-to-cover of 2.217 times with an average yield of 3.729%.

As at noon yesterday, the 3-, 5-, 7-, 10-, 15-, 20- and 30-year benchmark Malaysian Government Securities yields settled at 3.60%, 3.75%, 3.96%, 4.07%, 4.49%, 4.68% and 4.90%, respectively.

Amid key risk events this week, flows for local govvies remained flat at RM9.6bil compared to last week’s RM9.7bil.

Trading activities at the corporate bond space increased to RM3.6bil versus last week’s RM1.2bil. Some 63% of the trading volume was from the GG/

AAA segment with 31% from the AA segment and the remaining 6% from the A segment.

In the GG/AAA segment, strong interest was seen for Prasarana Malaysia Bhd’s 2020-2047 tranches, which saw yields close between 3.83% and 5.08% with RM815mil traded.

Interest was also seen for DanaInfra Nasional Bhd’s 2021-2041 papers with yields closing between 3.91% and 4.97% on the back of RM695mil flows.

Also, Danga Capital Bhd’s 2020-2027 paper recorded trades amounting to RM140mil with yields easing to a range between 4.04% and 4.50%. Meanwhile, Tenaga Nasional Bhd saw yields easing 1-5 bps with RM137mil changing hands.

For AA- rated papers, interest continued to be seen in the energy sector with Southern Power Generation Sdn Bhd’s 2024–2029 tranches posting a trade volume of RM140mil with yields closing lower.

Besides, BGSM Management Sdn Bhd’s 2019-2023 papers were seen traded between 4.30% and 4.56% on the back of RM162mil flows.

Meanwhile, interest was also seen for Lebuhraya DUKE Fasa 3 Sdn Bhd’s 2029-2034 papers, which saw RM90mil changing hands. This is closely followed by Jimah East Power Sdn Bhd’s 2026-2029 papers with RM85mil trade volume.