Malaysian Bond Market

The bond market was broadly muted with thin volume. The MGS and GII curve bull steepened, easing averagely by 7.6bps and 8.7bps. Rapid bond buying was boosted by noises of a potential OPR cut on the upcoming Bank Negara MPC meeting (July 7) – which helped offset temporary jitters in the market at the start of the week after S&P Global Ratings revised its sovereign outlook on Malaysia to negative while maintaining its A- rating. Nevertheless, the focus was also on the re-issuance of the 20-year GII ‘09/39 which garnered an exceptionally strong BTC of 2.05x on the back of Rm5.5bil in total, including Rm2bil of private placement. The auction closed with a high/low/average of 3.797%, 3.707% and 3.761%. As at noon Friday, the 3-, 5-, 7-, 10-, 15-, 20- and 30-year benchmark MGS yields settled at 2.17%, 2.39%, 2.60%, 2.80%, 3.27%, 3.59% and 4.00%.

Activities in the govvies segment climbed 89% w/w to Rm25.7bil from last week’s Rm13.6bil. The MGS segment surged 95% w/w to Rm14.7bil from Rm7.6bil in the previous week. Similarly, the GII rose 86% to Rm9.1bil from Rm4.9bil. Meanwhile, the shortterm bill (MTB/MITB) trading picked up 72% w/w to Rm1.8bil from Rm1.1bil.

In the GG/AAA segment, Danainfra Nasional Bhd 2024–2032 tranches dominated the list with a total of Rm330mil, trading between 2.59% and 3.27%. Meanwhile in the AA segment, some interest was seen in YTL Power International Bhd 2021–2028 tranches which gathered Rm150mil at 3.04%3.68%.