Malaysian Bond Market

The MGS curve was under selling pressure on Friday – taking the brunt from the selling wave in the US Treasury market on Thursday midnight.

As at Friday noon, the curve rose 4 bps–11bps while the closely watched 10-year MGS yields jumped 11.6bps to 3.054%, the highest level since April 2020.

Nevertheless, much of the focus this week was on the 7-year GII ‘09/27 reopening auction mid-week.

The auction garnered a strong BTC of 2.196x on the back of a total size amounting to Rm3.5bil. It closed with a high/low of 2.824% and 2.792% while averaging at 2.806%.

As at noon Friday, the 3-, 5-, 7-, 10-, 15-, 20- and 30-year benchmark MGS yields settled at 1.93%, 2.31%, 2.80%, 3.05%, 3.79%, 3.99% and 4.27%, respectively.

The govvies segment’s activities declined by 29% w-o-w to Rm14.6bil from last week’s Rm20.7bil.

The MGS segment fell by 32% to Rm8.4bil from Rm12.3bil in the previous week. The GII was seen decelerating around 37% to Rm5.2bil from Rm8.2bil.

Meanwhile, the short-term bill’s (MTB/MITB) trading surged to Rm992mil from Rm170mil.

Secondary trade volume rose 10% to Rm2.1bil from Rm1.9bil. The credit spread narrowed by 13bps on average across the curve.

The shorter end rose 13.6bps on average while both the belly and longer end of the curve eased averagely by 44.7bps and 2.6bps, respectively.