Malaysian Bond Market

The local bond market rallied as yields eased 3–6bps particularly from the belly to the back-end of the curve. It was mainly due to a dovish US Fed which reinforced the markets’ view for an OPR cut by BNM later this year. Nonetheless, there was also the reopening of the 30Y MGS 07/48 with a size of RM4.0bil which included a RM2bil private placement. It gathered a rather decent BTC of 1.72x with a high/low spread of 7.9bps between 4.629% and 4.550% while averaging at 4.591%. As at Friday afternoon, the 3-, 5- ,7- ,10- ,15- ,20- and 30-year benchmark MGS yields settled at 3.41%, 3.57%, 3.76%, 3.81%, 4.16%, 4.35% and 4.61% respectively.

Local govvies experienced tepid flows as total volume during the week was reduced to RM15.9bil from RM23.2bil in the week prior. Flows to the MGS slid 24.5% w/w to RM8.1bil from RM10.7bil while in the GII segment, trading activities dropped 39.8% w/w to RM7.38bil versus RM12.3bil in the week prior. However, interest in treasury bills was seen picking up by 81.0% to RM380.0mil from RM210.0mil in the prior week.

In the GG/AAA segment, Prasarana Malaysia Bhd ‘21–30 tranches traded between 3.811% and 4.270% on top of RM375mil changing hands. Next, Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) 2032–2039 tranches topped the list with RM350mil changing hands at 4.049%–4.440%. These were followed by Danainfra Nasional Bhd ’21–31 IMTN papers with yields between 3.810% and 4.101% on the back of a RM200mil volume.

Meanwhile in the AA segment, RHB Bank Bhd ’07/24 papers topped the list with RM70mil changing hands at 4.077%. Also, Anih Bhd 2024–2029 tranches settled at 4.437%–4.638% on top of RM64mil. Besides, UEM Sunrise Bhd 2020–2025 tranches saw RM57bil flow through 4.425%–4.682%.

Ringgit Interest Rate Swap (IRS) Market

The IRS curve was seen easing lower across the curve by 1-2bps. As at Friday’s noon pricing, the 3-month KLIBOR stood at 3.69%. Elsewhere, the 5-year CDS rose 10.5% to 68.4.