The Thomson Reuters BPAM All Bond Index persisted its downward trend to shed 0.74 per cent, closing at 136.32 from 137.33 in the previous week.
The MGS yields spiked between 8 to 41 bps from the three-year region onwards. The MGS yield curve has inverted in the 7-year to 10-year region as a result of the weak demand for the re-opened 7-year benchmark MGS auction.
Over the week, government bonds are under severe selling pressure as the declining crude oil prices keep foreign investors away from petroleum-exporting countries like Malaysia.
Meanwhile, the Malaysian ringgit extended its losses to close at 3.4950 against the US dollar and become the worst-hit currency in the region.
On the contrary, there were positive news released in the United States, which include healthy employment data and stronger-than-expected retail sales figure.
The turnover of the top 10 most actively traded bonds was a tad lower from the previous week, decreased by 5.5 per cent to RM12 billion from RM12.7 billion last week.
The seven-year benchmark MGS which was re-opened this week topped the list with RM2.8 billion being transacted, followed by the 10-year benchmark GII which was re-opened the week before with RM2.2 billion done.
On Wednesday, BNM announced the tender details for the re-opening of the RM3 billion seven-year benchmark MGS maturing on 30 September 2021.
The auction closed on 12 December 2014 with the lowest bid-to-cover ratio of the year at 1.323 times. The highest, average and lowest yields are 4.35, 4.277 and 4.207 per cent respectively.
On December 8, 2014, Silver Sparrow Bhd issued two tranches of 3-year Medium Term Notes (MTN) with a total issuance size of RM45 million.
The first tranche has a coupon rate of 4.35 per cent and is guaranteed by Malayan Banking Bhd and OCBC Bank (Malaysia) Bhd. The second tranche has a coupon rate of 4.4 per cent and is guaranteed by Danajamin Nasional Bhd. The bonds are rated AAA(BG) and AAA(FG) respectively with a stable outlook by RAM Ratings.
On December 9, 2014, Sabah State Government issued a five-year bond worth RM1 billion. The coupon rate is 4.275 per cent. The bond is rated AAA with a stable outlook by RAM Ratings.
On December 10, 2014, Malaysia Building Society Bhd (MBSB) issued 10 tranches of structured covered sukuk with a total issuance size of RM700 million.
The sukuk have tenures ranging from one to 10 years and bear profit rates from four per cent to five per cent.
On December 12, 2014, UniTapah Sdn Bhd (UniTapah), the concessionaire for the design, construction and maintenance of the new campus for Universiti Teknologi MARA (UiTM) in Perak, issued 37 tranches of sukuk maturing from 2016 to 2034 with a total issuance size of RM510 million. The profit rates range between 4.66 per cent and 6.47 per cent. The sukuk are rated AA2 with a stable outlook by RAM Ratings.