Malaysian Bond Mar­ket

The Star Malaysia - StarBiz - - Treasury Pulse -

The lo­cal bond mar­ket con­tin­ued its mo­mem­tum from last week amid the strength­en­ing ring­git. Most of the buy­ing flows matched profit tak­ers which re­sulted in a tight price ac­tion across the curves.

On the other hand, the new 10-year Gov­ern­ment In­vest­ment Is­sue (GII) auc­tion re­ceived a very strong bid-to-cover (BTC) of 4.07 times, the high­est ever seen over the past few years, de­spite the larger-than-usual is­suance size of RM5­bil, in­clud­ing a RM1.5bil placed pri­vately.

The new bench­mark has a high/ low spread of 2.5 bps and av­er­ag­ing at 4.13%. Vol­ume surged 68.5% to RM24.49bil from last week’s RM14.53bil.

Flows were spread be­tween Malaysia Gov­ern­ment Se­cu­ri­ties (MGS) and GII with the ra­tio of 54% and 43.4% while the re­main­ing 2.6% were on SPK and MTB/MITB seg­ments.

As at yes­ter­day af­ter­noon, the 3-, 5- ,7- ,10- ,15- ,20- and 30-year bench­mark MGS yield set­tled at 3.57%, 3.74%, 3.97%, 4.07%, 4.40%, 4.57% and 4.80% re­spec­tively.

In the do­mes­tic ex­change-traded fund (ETF) space, the Markit iBoxx ABF Malaysia Bond In­dex, an in­dex com­pris­ing MGS, GII and GG, re­turned 0.263% in the week from Jan 4, 2019 to Jan 10, 2019 as the in­dex yield fell from 4.08% to 4.07%.

In the same pe­riod, the ABF Malaysia Bond In­dex Fund, an ETF which tracks the in­dex, posted a re­turn of a 0.270% rise in the net as­set value as the fund yield re­mained un­changed at 4.05%.

The to­tal vol­ume for the pri­vate debt se­cu­ri­ties (PDS) seg­ment re­bounded 162.4% from last week’s RM1.4bil to RM3.7bil. The GG/AAA seg­ment was mostly traded as it at­trib­uted about 38.5% of this week’s trade with the AA and A seg­ments con­tribut­ing 35.3% and 26.2%, re­spec­tively.

In the GG/AAA seg­ment, flows were fo­cused on Pen­gu­ru­san Air SPV Bhd’s 2019-2025 Is­lamic medium-term notes, which saw RM345mil chang­ing hands in the range of 3.718%-4.207%.

2022-2047 DanaIn­fra Na­sional Bhd tranches traded be­tween 3.993% and 5.061% on the back of RM210.1mil. Next, Per­badanan Tabung Pen­didikan Tinggi Na­sional’s 2022-2026 notes eased to the range of 4.039%-4.340% with RM120mil traded.

On the AA-rated front, flows were con­cen­trated on the en­ergy sec­tor, with the 2023-2038 En­dra En­ergy Sdn Bhd tranches trad­ing the most with a vol­ume of RM230mil and a range from 5.300% to 6.238%. More­over, YTL Power Bhd ‘05/27 pa­pers closed at 4.848% with RM180mil chang­ing hands.

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