Malaysian Bond Market

In the local bond market, attention was on the reopening of RM3bil 7-year 08/25 Government Investment Issue with a RM2.5bil private placement.

This is the first auction postbudget after the government announced a wider fiscal deficit, which would be made up by this increased issuance.

Although the size of the issuance was larger than what the market had anticipated, it closed with a pretty strong bid-to-cover of 2.8 times.

Meanwhile, the Malaysian Government Securities (MGS) curve witnessed some pressure owing to early week risk-off sentiment in the global markets.

As at yesterday morning, the 3-,5-,7-,10-, 15-, 20- and 30-year benchmark MGS yields settled at 3.688%, 3.828%, 4.045%, 4.146%, 4.588%, 4.787% and 4.931%, respectively.

Flows for local govvies are lower at RM5.9bil compared with last week’s RM7.4bil.

Trading activities in the secondary corporate bond, however, improved to RM1.32bil versus last week’s RM740mil.

Some 38% of trade volume came from the GG/AAA segment while 61% were attributed to AA-rated papers and less than 1% are from the A segment.

In the GG/AAA segment, heavy interest was seen for Pengurus Air SPV Bhd’s 2020-2030 papers, which saw RM140mil changing hands with yields closing between 3.838% and 4.05%.

Meanwhile, Lembaga Pembiayaan Perumahan Sektor Awam’s 20202037 tranches saw yields closing between 3.849% and 4.854% level on the back of RM100mil flows.

This is followed by Rantau Abang Capital Bhd’s 12/20 Islamic medium-term notes, which saw yields of 4.05% with RM65mil changing hand.

On the AA-rated front, Southern Power Generation Sdn Bhd 20272034 saw yields closed between 4.788% and 5.113% with RM133mil changing hands.

This is closely followed by Celcom Networks Sdn Bhd 2022-2027 tranches’ traded RM100mil and closed with a range of 4.541%–4.789%.

Lastly, UEM Sunrise Bhd 20192022 tranches traded RM35mil and closed between 4.408%–4.818%.