Commentary Of The Week

The Thomson Reuters BPAM All Bond Index posted gains of 0.16 per cent to close at 159.041 points from 158.787 points last Friday.

The gain was a result of lower MGS yields, shed up to two bps across the board as well as the heavy buying interest in the corporate bond/sukuk segment.

On the international front, the European Central Bank (ECB) had left its interest rate unchanged and the key interest rates are expected to remain at their present levels at least through the summer of 2019.

Furthermore, the ECB is also expected to phase out its bond buying program by December 2018.

Top 10 most active bonds:

The top 10 most actively traded bonds registered a total trading volume of RM7.3 billion compared to RM5 billion.

Trading interest continued to focus on the 10-year benchmark GII maturing on October 31, 2028 as the benchmark GII had topped the list for four consecutive weeks with a total of RM2.5 billion changed hands.

Sovereign auction(s):

On July 25, 2018, BNM announced the tender details for the reopening of the RM3 billion seven- year benchmark MGS maturing on March 14, 2025.

The tender closed on July 27, 2018 with a strong bid-to-cover ratio of 3.302 times.

The highest, average and lowest yields came in at 3.99, 3.984 and 3.97 per cent respectively.

New issuance(s):

On July 25, 2018, United Overseas Bank (Malaysia) Bhd issued a RM600 million 10non-call-five-year subordinated note with coupon rate of 4.8 per cent.

The subordinated note is rated AA1 with stable outlook by RAM Ratings. On July 27, 2018, Public Islamic Bank Bhd issued a threeyear senior sukuk that bears profit rate of 4.3 per cent.

The RM520 million issuance is rated AAA with stable outlook by RAM Ratings.