At the beginning of the week, the ringgit Bond Market was relatively quiet after the long weekend as most market players stayed on the sidelines ahead of the next Malaysia Productivity Corporation (MPC) meeting which was scheduled on September 18, 2014.
However, trading activities picked up on Friday with MGS yields rising between three basis points (bps) and nine bps from the three-year tenure onwards, in line with US Treasury rising yields during the week.
The Treasury market yield curve steepened during the week as the US released better-than-expected ISM manufacturing index data for August 2014, indicating that the US economy is on track with its recovery.
As a result, the TR BPAM All Bond Index registered a loss of 0.08 per cent to close at 135.95 compared to 136.06 the previous week.
On the global front, the European Central Bank (ECB) had cut its main refinancing rates to 0.05 per cent from 0.15 per cent to address concerns of heightened deflation risk and weak economic recovery.
At the same time, the ECB said it will start buying assets starting in October to ease credit conditions in the bloc.
Top 10 most active bonds:
The turnover for the top 10 most actively traded bonds aggregated at RM10.56 billion, decreased by 20 per cent from RM13.15 billion last week. The three-year Malaysian Government Securities (MGS) benchmark maturing in March 2017, which was reopened for tender this week, was the most heavily traded sovereign bond over the week with RM2.4 billion changed hands.
Sovereign bond auction
On September 3, 2014, the Government of Malaysia announced the re-opening tender for the three-year benchmark MGS paper maturing on March 15, 2017 with an issuance size of RM3.5 billion.
The tender closed on September 5, 2014 with a bid-to-cover ratio of 1.734 times. The lowest, average and highest yields are 3.545 per cent, 3.583 and 3.6 per cent respectively.
New bond(s)
On September 2, 2014, Bumitama Agri Ltd, an Indonesian plantation company listed on the Singapore stock exchange issued a five-year Islamic Medium Term Notes (IMTN) worth RM500 million.
The IMTN, rated AA3 by RAM Ratings, carries a profit rate of five per cent.