Malaysian Bond Market

The local govvies’ saw a general upwards trend across the curve. Over the week, there was some slight selling pressure causing the local bond yields to spike 0.3bps to 13bps. Meanwhile, Bank Negara reopened an auction for the seven-year MGII 08/25 with an issue size of RM3bil. The auction garnered a strong BTC of 3.397x, ranging between 4.18% and 4.218%, while averaging at 4.202%.

At Friday’s noon pricing, the 3-, 5-, 7-, 10-, 15-, 20- and 30-year benchmark MGS yields settled at 3.74%, 3.87%, 4.05%, 4.22%, 4.61%, 4.89% and 4.94% respectively.

Trading activities for the benchmark local govvies’ eased compared to last week. For the week, trading volume stood at RM18.4bil from RM2.4bil from the week prior.

Meanwhile, trading activities in the secondary corporate bond market recovered slowly, with total trading volume at RM900mil against RM300mil in the previous week due to shorter trading days in view of the 14th general election holidays. Some 44% of the trading volume was from GG/AAA with 49% from the AA segment and the remaining 7% from the A segment.

In the GG/AAA segment, notable trades included ‘11/18 and ‘10/18 Cagamas Bhd bonds which closed with yields 2 basis points (bps) and 4bps higher at 3.84% and 3.83% respectively with a total trading volume of RM160mil. Besides, ‘02/21 GovCo Holdings Bhd bond registered yields of 10bps higher at 4.05% with RM60mil changing hands.

Furthermore, interest was seen in the ‘09/18 Malaysia Airport Holdings Bhd bond which closed with yields 3 bps higher at 4.03%, and RM50mil traded. Meanwhile, ‘07/24 and ‘02/48 DanaInfra Nasional Bhd bonds settled with mixed yields higher at 4.52% and 5.29% with a trading volume of RM25mil.

Elsewhere in the AA segment, notable trades included 2023-2034 Southern Power Generation Sdn Bhd tranches posting a trading volume of RM70mil and ended with yields higher at between 4.65% and 5.37%.

Interest was seen in banking industry with 2018-2019 Sabah Development Bank Bhd tranches closing with mixed yields at between 4.39% and 4.75% and a total trading volume of RM50mil.

Also from the banking industry, 2019-2021 MBSB Bank Bhd tranches recorded a trading volume of RM40mil with higher yields between 4.55% and 4.9%. In addition, ‘02/19 Media Chinese International Ltd bond registered higher yields by 18bps to 4.79% with RM30mil changing hands.