BPA Malaysia weekly bond market report 30 August 2015

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TA01187The Index has ended the week a tad higher to close at 140.24 from 140.17 in the previous week. However, the mild gain did not reflect the heightened volatility experienced by the market participants throughout the week. US dollar to ringgit exchange rate opened at an extremely weak level of 4.2435. The weak sentiment was exacerbated by the risk aversion flows around the globe later in the day preluded by the plunge in the Chinese stock market.

The extreme fear and volatility subsequently rippled to other financial markets like equity, bond, forex and commodities until Thursday in which the market finally calmed down and restored some orders and regained some of the losses incurred earlier in the week.

The total trade volume of the top 10 most active bonds increased by 30 per cent from RM8.5 billion to RM11.1 billion this week led by the reopened 10-year benchmark MGS maturing in September 2025, which garnered approximately RM3.4 billion of trades.

On Tuesday, Bank Negara Malaysia announced the auction details for the reopening of the 10-year MGS maturing on 15 September 2025 with issuance size of RM3 billion.

On Monday, GENM Capital Bhd issued a five-year and a 10-year bond with coupon rate of 4.5 and 4.9 per cent respectively.  TSH Sukuk Ijarah Bhd issued a five-year sukuk with an issuance size of RM30 million that carries a profit rate of 5.23 per cent.

On Friday, West Coast Expressway Sdn Bhd issued 20 tranches of sukuk with tenures ranging from 12 years to 21 years that are guaranteed by Danajamin Nasional Bhd and Bank Pembangunan Malaysia Bhd (BPMB) with a combined issuance size of RM1 billion.

On Friday, RAM Ratings downgraded Bahrain Mumtalakat Holding Company BSC’s sukuk to AA3/Stable from AA2/Negative in conjuction with the downgrade of Bahrain’s rating to AA3(pi)/Stable from AA2(pi)/Negative.

The downgrade is mainly premised on country’s steeper-than-anticipated fiscal deterioration.