During the week, there was lack of meaningful events in the local bond market except the reopening tender for 10-benchmark GII, which has registered a healthy bid-to-cover ratio of 2.598 times.
Besides, buying interest was seen on the belly of the MGS curve, which the MGS curve of this region had flatten by one to four bps. As a result, the TR BPAM All Bond Index registered a gain of 0.17 per cent to close at 136.06, compared to 135.83 in the previous week.
On the foreign front, the European Commission in Brussels released the figure of economic confidence in eurozone on Thursday, which fell to the lowest level this year at 100.6, against the market estimate of 101.5.
This data has prompted the speculation on further monetary stimulus by ECB as the ECB’s president Mario Draghi had mentioned during the annual conference in Jackson Hole last Friday that that the ECB stands ready to adjust policy stance further amid the concerns on heightened deflation risk and weak economic recovery.
On the same day, US released that the gross domestic product grew at 4.2 per cent in second quarter versus the estimated growth rate at four per cent.
The total trading volume for the top 10 most active bonds increased by 42.3 per cent this week to RM13.15 billion. The higher trading volume is mainly contributed by 10-year benchmark GII and 10-year benchmark MGS, which recorded trading volume of RM2.43 billion and RM1.77 billion respectively.
On August 26, 2014, the Government announced the re-opening tender for RM3 billion 10-year benchmark GII paper maturing on May 22, 2024. The tender closed on August 28, 2014 with a healthy bid-to-cover ratio of 2.598 times. The lowest, average and highest yields are 4.125, 4.140 and 4.146 per cent respectively.
On August 27, 2014, Perbadanan Tabung Pendidikan Tinggi Nasional issued two tranches of seven and 12-year sukuk with a total issuance size of RM1 billion.
On August 28, 2014, Rantau Abang Capital Bhd, a wholly owned subsidiary of Khazanah Nasional Bhd, issued a RM1.5 billion five-year sukuk.
On August 28, 2014, MARC had affirmed the rating of Celcom Networks Sdn Bhd’s (CNSB) RM5 billion Sukuk Murabahah Programme at AAAIS. At the same time, the outlook on the rating has been revised to negative from stable. The outlook revision reflects increasing risks associated with the Celcom group’s persistent negative free cash flow and negative shareholders’ equity on the back of significant dividend payments to parent company Axiata Group Bhd.
Besides, the negative outlook reflects the risk of Celcom group’s rating being lowered if cash flow protection leverage metrics are not restored to levels more appropriate for its current rating band