Malaysian Bond Market
Without fresh catalysts in sight, it was a rather quiet week in the local bond market this week. Despite a hawkish FOMC minutes and the tabling of the Mid-Term Review for the 11th Malaysia Plan, trading activities were lukewarm with yields largely traded sideways throughout the week.
Key highlights for the mid-term review include a softer GDP target of 4.5%–5.5% for 2018–2020 while fiscal deficit is set to widen to 3% in 2020. Besides, development expenditure ceiling is reduced by RM40bil to RM220bil for the plan period.
As at yesterday morning, the 3-, 5-, 7-, 10-, 15-, 20- and 30-year benchmark Malaysian Government Securities yields settled at 3.63%, 3.79%, 4.02%, 4.13%, 4.57%, 4.79% and 4.93%, respectively.
Flows for local govvies tapered off yet again to RM6bil compared with last week’s RM7.3bil.
Meanwhile, trading activities in the secondary corporate bond space improved to RM3.3bil versus last week’s RM1.2bil.
Some 54% of trade volume came from the GG/AAA segment while 30% were attributed to AA-rated papers and the remaining 16% from the A segment.
In the GG/AAA segment, interest was seen in Cagamas Bhd’s short-end 2019-2023 papers with yields mixed between 3.60% and 4.21% on the back of RM487mil trade volume.
Interest was also seen for Danga Capital Bhd’s 2026-2030 Islamic medium-term notes (IMTNs), with yields closing between 4.53% and 4.62% amid RM290mil flows.
Also, Telekom Malaysia Bhd’s 20232027 papers saw RM280mil changing hands with yields ending between 4.28% and 4.53%. Meanwhile, Prasarana Malaysia Bhd’s 2021-2047 papers saw RM170mil changing hands, with yields mixed between 3.98% and 5.05%.
On to the AA-rated space, improved flows were dominated by energy names, with Southern Power Generations Bhd’s 2023-2035 tranches garnering RM130mil trade volume with yields closing firmer between 4.50% and 5.20%.
CIMB Bhd’s 2024-2028 papers, on the other hand, saw RM145mil traded with yields closing between 4.53% and 5.53%. Meanwhile, interest was seen for BGSM Management Sdn Bhd’s 2018-2026 IMTNs as yields closed firmer with RM80mil changing hands.
Likewise, Lebuhraya DUKE Fasa 3’s 2031-2037 papers saw RM80mil traded, with yields closing between 5.08% and 5.58%.