BPA Malaysia Weekly Bond Market Report April 21 2013

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The Thomson Reuters Bond Pricing Agency Malaysia (BPAM) All Bond Index posted steady gains of 0.11 per cent to close at 131.91 this week from 131.77 last week.

The gains were mainly due to the fall in the yield levels of long-dated Malaysian Govern­ment Securities (MGS) papers following strong demand for the new 20-year benchmark MGS paper at the close of its auction late last week.

The yield of the new 20-year benchmark MGS paper de­creased 2.5 basis poiints to close at 3.8187 per cent this week on RM626 million worth of trades.

Meanwhile, the steady per­formance of the other bench­mark MGS papers coincided with the stabilising of the US Treasuries as key data released during the week, such as the US jobless claims as well as Malaysia’s Consumer Price Index (CPI), provided no fresh impetus to both foreign and do­mestic investors in the ringgit bond market.

This week, the traded volume of the top 10 most actively traded bonds fell to RM10.4 billion from last week’s RM19.9 billion, fol­lowing the lack of fresh new leads in the ringgit bond market.

As with all other weeks, the sovereign bonds continued to dominate the list of top 10 most actively traded bonds with the seven-year benchmark MGS pa­per maturing March 2020 topping the list with RM1.9 billion worth of bonds changing hands.

On April 15, 2013, RAM Ratings had lifted the positive Rating Watch and concurrently upgrad­ed the long-term rating of OSK Investment Bank Bhd’s (OSK Investment) subordinated me­dium-term notes (MTN), issued under its RM400 million MTN Programme (2008 to 2022), from A2 to AA3, with a stable outlook to reflect the credit standing of RHB Investment Bank Bhd (RHB Investment), the new obligor of OSK Investment’s debt securi­ties, following the transfer of the entire business of OSK Invest­ment to RHB Investment on April 13, 2013, pursuant to the vesting order granted by the High Court on February 27, 2013.

On April 17, 2013, Malaysia Rating Corporation Bhd (MARC) had downgraded its rating on Perwaja Steel Sdn Bhd’s (Per­waja) RM400 million Murabahah Medium Term Notes programme to BBB-ID from A-ID and had concurrently placed the rating on MARCWatch Negative.

On the same day, MARC had also placed its ratings of MARC-2ID/A-ID and A-ID on Kinsteel Bhd’s (Kinsteel) RM100 mil­lion Murabahah Commercial Papers/Medium Term Notes Programme and RM100 million Murabahah Medium Term Notes Programme respectively on MARCWatch Negative.

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