The Thomson Reuters BPAM All Bond Index rebounded from its downward trend in the past two weeks with a gain of 0.26 per cent, closing at 136.67 from 136.32 in the previous week. The seven and 10-year MGS curve point which saw an inversion last week has normalised with the seven-year MGS yield eased by 16bps and it is now once again traded at a lower yield against its 10-year counterpart.
On December 17, Department of Statistics Malaysia reported that Malaysia’s consumer price index (CPI) rose to three per cent in the month of November from 2.8 per cent recorded in October, driven mainly by the increase in prices of alcoholic beverages & tobacco (10.5 per cent); transport (five per cent); restaurants and hotels (4.3 per cent); housing, water, electricity, gas & other fuels (3.5 per cent); health (3.4 per cent) and food & non-alcoholic beverages (2.9 per cent).
On December 18, the World Bank cut its 2015 GDP growth forecast for Malaysia from an earlier estimate of 4.9 to 4.7 per cent citing expectations of slower export growth, moderate oil and gas investment amid declining oil prices as well as weaker private consumption on account of higher prices following the implementation of GST.
Global equity markets rallied for two consecutive days on the back of the dovish remarks made by the US Fed following the conclusion of the monetary policy meeting on December 17, 2014.
The total volume of the top 10 most actively traded bonds came in slightly lower from the previous week at RM10.8 billion.
On December 15, 2014, Malaysia Airport Holdings Bhd issued a RM1 billion worth of perpetual callable subordinated sukuk carrying a profit rate of 5.75 per cent.
On December 16, 2014, Berjaya Land Bhd issued five tranches of Medium Term Notes (MTN) under a RM650 million guaranteed MTN progamme.
On December 19, 2014, Northport (Malaysia) Bhd issued a 10-year Islamic MTN with an issue size of RM350 million. The sukuk carries a profit rate of 5.78 per cent and was rated AA3 with stable outlook by RAM Ratings.
On December 18, 2014, RAM Ratings has downgraded MRCB Southern Link Bhd’s Senior sukuk from BBB3 to BB1 and Junior sukuk from BB1 to B1 citing the company’s weaker cash generation and potential insufficiency of funds to meet its financial obligations. The rating agency noted that daily traffic on the EDL has been significantly below expectation since its commencement in August 2014 and should traffic not recover and that the company does not undertake a refinancing exercise, the company might face cash shortfall in the near term. The rating agency also indicated that future rating action of the sukuk will depend on the pace of completion of any refinancing exercise as well as the EDL’s traffic performance.