Malaysian Bond Market

The local bond market witnessed subdued trading activities as market players were largely on cautious mode amid the weaker ringgit and a lack of market driving catalyst from global markets.

Despite strong risk-off sentiments in global markets, local govvies saw yields mixed on the back of tepid flows.

This was, however, short-lived as light selling pressure was seen for local govvies with yields rising 1.54.5 bps across the curve after Moody’s indicated credit negative for Malaysia in the event of budget deficit expansion.

As at yesterday morning, the 3-, 5-, 7-, 10-, 15-, 20- and 30-year benchmark Malaysian Government Securities (MGS) yields settled at 3.67%, 3.82%, 4.05%, 4.18%, 4.60%, 4.83% and 4.93%, respectively. Flows for local govvies improved slightly to RM7bil compared to last week’s RM6bil.

Meanwhile, trading activities in the secondary corporate bond space stayed flat at RM3.4bil versus last week’s RM3.3bil. Some 59% of trade volume came from GG/AAA segment while 38% were attributed to AA-rated papers and the remaining 3% from the A segment.

In the GG/AAA segment, interest was seen in Lembaga Pembiayaan Perumahan Sektor Awam’s 20222024 tranches, which saw yields closing mixed between 3.99% and 3.17% on the back of RM250mil trade volume.

Meanwhile, Cagamas Bhd’s shortterm 02/19 papers saw yields easing 4.3 bps to 3.66% with RM200mil changing hands.

Likewise, Public Bank Bhd’s 04/19 medium-term notes saw yields closing firmer at 3.88% with RM200mil traded. Lastly, interest was also seen for Pengurusan Air SPV Bhd’s 20232026 papers, which closed between 4.05% and 4.28% on the back of RM175mil flows.

On to the AA-rated space, flows continued to be dominated by energy names, with Southern Power Generations Bhd’s 2022-2035 papers closing with firmer yields between 4.44% and 5.17% with RM257mil changing hands.

Sarawak Energy Bhd 2021-2036 papers, on the other hand, garnered RM235mil flows with yields closing between 4.29% and 4.84%. Meanwhile, interest was also seen in YTL Power International Bhd’s 20232028 papers, with RM120mil traded with yields closing mixed.

Lastly, Celcom Networks Sdn Bhd’s 2019-2027 Islamic medium-term notes closed between 4.17% and 4.79% with RM70.6mil flows.