Malaysian Bond Market
The local bond market remained largely muted over the week amidst a global risk-on sentiment, added with rising US Treasury yields. The MGS curve steepened slightly with some selling pressure at the back end of the curve. Meanwhile, the most closely watched 10-year MGS remained unchanged week-on-week at 3.419%. However, focus of the week was on the 10-year GII (‘09/39) reopening auction, which closed strongly with a high BTC at 3.320x due to a small issuance of Rm2.0bil with an additional Rm0.5bil of private placement. At the point of writing, the 3-, 5-, 7-, 10-, 15-, 20- and 30-year benchmark MGS yields settled at 3.11%, 3.23%, 3.36%, 3.42%, 3.60%, 3.74% and 4.01% respectively.
The Markit iboxx ABF Malaysia Bond Index, an index comprising the MGS, GII and GG, returned -0.071% in the week 11 Oct–17 Oct 2019 as the index yield remained unchanged at 3.46%. In the same period, the ABF Malaysia Bond Index Fund, an ETF which tracks the index, returned -0.049% as the fund yield was also unchanged at 3.45%. Month to date, the index has returned -0.101% while the fund posted -0.091% gain.
Local govvies activities rebounded 14% to Rm12.9bil from last week’s Rm11.4bil. Matching the pace, the GII papers traded higher by 65% w/w to Rm3.8bil from Rm2.3bil, recording 29% of the total volume. However, interest in the MGS dropped slightly by 0.2% to Rm8.81bil from Rm8.83bil, occupying 68% of the week’s flows. MTB/MITB leapt 210% to Rm310mil from Rm100mil in the prior week. On another note, the secondary market surged 20% w/w to Rm1.6bil from Rm1.3bil a week earlier. The GG/AAA segment contributed 55% of the flows while the AA segment constituted 38% and the A-papers 7%.
In the GG/AAA segment, Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) 2024–2026 tranches dominated the list with Rm140.2mil, trading between 3.335% and 3.490%. Besides, Danainfra Nasional Bhd 2023–2046 IMTN tranches gathered Rm126.5mil with yields closing at 3.441% and 4.110%. These were followed by MKD Kencana Sdn Bhd ‘10/32 papers which gathered Rm120mil, traded at 3.739%–3.800% on the back of Rm120mil.
Meanwhile in the AA segment, Edra Energy Sdn Bhd 2022–2038 tranches accumulated Rm210.5mil, changing hands between 4.094% and 4.699%. Next, 2024–2025 UEM Sunrise papers gathered Rm151.1mil, trading at 3.778%–3.928%. Last but not least were ‘10/31 Malayan Banking Bhd issuances which traded between 3.897% and 3.951% amounting to Rm80.3mil.