Malaysian Bond Market

Local govvies’ yields rose across the curve save for the 5- and 15-year yields amid the uncertainties and key risk events. Focus of the week was on the 15Y GII 6/33 re-opening, which saw RM2.5bil issued with an additional RM1bil privately placed. The auction closed with a decent BTC of 1.996 times. At Friday’s noon pricing, the 3-, 5-, 7-, 10-, 15-, 20- and 30-year benchmark MGS yields settled at 3.40%, 3.53%, 3.88%, 3.94%, 4.41%, 4.55% and 4.81% respectively.

Trading activities for the benchmark local govvies were lacklustre compared to last week as market participants largely took to the sidelines in anticipation of Federal Open Market Committee and Malaysia inflation data. For the week, trading volume fell to RM7.2bil from RM12.6bil in the week prior.

Trading activities in the secondary corporate bond market were also sub- dued compared to the week before. Week-to-date, total trading volume was at RM1.4bil compared to previous week’s RM2.4bil. Roughly 53% of the trading volume came from GG/AAA while 47% was from the AA segment and the balance 0.3% from the A segment. In the GG/AAA segment, notable trades included ‘03/19 and ‘09/24 Prasarana Malaysia Bhd bonds, which closed with mixed yields between 3.66% and 4.37% respectively, amounting to a total trading volume of RM210mil.

There was also interest in 2020-2033 Danga Capital Bhd tranches which registered lower yields between 4.14% and 4.98%, with RM70mil changing hands. Furthermore, some interest on the ‘08/19 and ‘03/29 Rantau Abang Capital Bhd bonds was seen with yields lower by 1 bps to 4.03% and 2 bps to 4.72%, respectively, with a total trading volume of RM70mil.

Meanwhile, ‘08/19 Khazanah Nasional Bhd bonds closed with yields lower by 16 bps to 3.79%, amounting to a total trading volume of RM70mil.

MYR Interest Rate Swap (IRS) Market

As at yesterday’s 11.30am pricing, the 3-month Klibor stood at 3.69%. Elsewhere, the IRS curve was largely unmoved.