BPA Malaysia Weekly Bond Market Report: 14 Aug 2011

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Following active buying interest in the ringgit bond market, particu­larly in government se­curities, all of the top 10 bonds traded during the week were MGS and GII as well as BNM notes, which are all sovereign papers.

The All Bond Index Per­formance had a weekly gain of 0.26 per cent from 122.01 to 122.33 points.

Similar buying inter­est in government secu­rities and government guaranteed issuance in the previous week was seen where both the MGS and government guaran­teed curves continued to display a bull flattening trend.

The bullish govern­ment guaranteed seg­ment was mainly driven by active trading of the long-tenured govern­ment guaranteed issu­ance by Syarikat Pras­arana Negara Bhd and Pengurusan Air SPV Bhd.

It was a relatively quiet week compared with the previous week when many new issuers made their way into the local bond market in the wake of strong foreign buying interest in emerging markets which has re­mained robust since the beginning of 2011.

The most significant issuance of the week was CIMB Bank Bhd’s RM1.35 billion worth of AA1 rated 10 non-call five year subordinated debts on August 8, 2011, with a coupon rate of 4.15 per cent.

Earlier in the week, Bank Negara Malaysia announced the reopen­ing of the 15-year MGS (MGS 4/26) at an issue size of RM5 billion (Pub­lic tender: RM3 billion and private placement: RM2 billion) on August 15, 2011.