Malaysian Bond Market

In local bond market, the spotlight fell on the larger-than-anticipated issues of a total of RM4.5bil 5y MGS reopening included a RM1.5bil private placement, which posted a strong BTC of 2.316x, averaging at 3.874% despite the large issue size. But the yield was higher at 3.874% compared with pre-election’s 3.757%. Local govvies saw some 8.9% increase in total volume to RM10.33bil in the current week. The majority of the flow are aimed towards the belly to the tail of the curve. As at Friday afternoon, the 3-, 5-, 7-, 10-, 15-, 20- and 30-year benchmark MGS yields settled at 3.68%, 3.86%, 4.05%, 4.13%, 4.54%, 4.76% and 4.92% respectively.

Trading activities in the secondary corporate bond dropped significantly to RM807mil versus last week’s RM1.1bil. Some 18% of trade volume came from the GG/AAA segment while 70% were attributed to AA-rated papers and less than 1% are from the A segment.

In the GG/AAA segment, most interest was seen in 2019-2025 Cagamas Bhd papers which saw RM80mil changing hands at between 3.819% and 4.380%. Meanwhile, Danainfra Nasional Bhd ‘11/33 issuance saw yields closing at 4.798% on the back of RM50mil flows. This is followed by Berjaya Land Bhd’s 12/18 MTNs which saw yields of 4.335% with RM40mil changing hand.

On the AA-rated front, UOB Bank (M) Bhd ‘05/25 saw yields closed around 4.358% with RM180mil changing hands. This is followed by Fortune Premier ‘09/25 tranches traded RM160mil and yield closed to 4.938%. Lastly, Sarawak Energy Bhd ‘21-33 traches traded between 4.477% and 4.95% on top of RM70.0mil changing hand.