Looking at the Thomson Reuters BPAM All Bond Index Performance, investors remained cautious throughout the week amid concerns over the on-going geopolitical tension stemming mainly between the US and North Korea, and political uncertainties arising from the upcoming French presidential election.
On top of that, UK Prime Minister Theresa May had surprisingly called for a snap general election to be held on June 8 this year, in view that this will strengthen her political support as she heads into Brexit negotiations.
Despite the uncertainties brewing in the international financial markets, the MGS curve ended the week mixed as the short-to-medium term region eased by around one basis point, while the long term region climbed up to four basis points.
As a result, the TR BPAM All Bond index closed at 151.470 points from 151.368 points in the previous week, registering a mere 0.067 per cent gain.
On Wednesday, the Department of Statistics reported that Malaysia’s Consumer Price Index (CPI) in March 2017 rose 5.1 per cent year-on-year, owing to the lower base last year and higher retail fuel prices compared to March 2016.
Apart from that, the increase in the indices of Transport (23 per cent), Food & Non-Alcoholic Beverages (4.1 per cent), Recreation Services & Culture (three per cent), Health (2.6 per cent), Restaurants and Hotels (2.3 per cent) and Housing, Water, Electricity, Gas & Other Fuels (2.1 per cent) also contributed to the significant increase in March CPI.
On April 21, 2017, Bank Negara Malaysia announced that the international reserves stood at US$95.7 billion (RM423.2 billion) as at April 14, 2017.
The reserves position is sufficient to finance 8.2 months of retained imports and is 1.1 times the short-term external debt.
Looking at the top 10 most active bonds, total trade volume for the top 10 most actively traded bonds decreased to RM7.3 billion from RM8.8 billion last week.
The short term off-the-run MGS maturing on September 15, 2017 topped the list with RM1.5 billion changed hands.
Looking at new issuances, on April 17, 2017, Lembaga Pembiayaan Perumahan Sektor Awam issued six tranches of government guaranteed sukuk with tenures ranging from five to 30 years. The total issuance amount is RM3.25 billion with profit rates ranging from 4.17 to 5.22 per cent.
On the same day, Toyota Capital Malaysia Sdn Bhd issued a 1-year Medium Term Notes (MTN) with an issuance size of RM15 million that carries a coupon rate of 4.15 per cent.
The MTN is rated AAA(S) with stable outlook by RAM Ratings. The issuance is guaranteed by Toyota Motor Finance (Netherlands) BV.