The Malaysian bond market welcomed the year of 2018 with the ringgit continued to strengthen to an impressive 3.9980 against US dollar on Friday.
The TR BPAM All Bond Index also gained 0.169 per cent, ending the week at 156.436 points compared to 156.172 points last Friday.
The gain was underpinned by the strength in the sovereign segment where MGS yields eased as much as five bps at the 10-year region of the yield curve.
On January 5, 2018, Bank Negara Malaysia (BNM) reported that the international reserves amounted to US$102.4 billion as at December 29, 2017 compared to US$94.5 billion as at end-2016.
The reserves position is sufficient to finance 7.2 months of retained imports and is 1.1 times the short-term external debt.
On the same day, the Department of Statistics Malaysia reported the external trade statistics for the month of November 2017.
On a year-on-year basis, exports rose by 14.4 per cent to RM83.5 billion while imports grew 15.2 per cent to RM73.6 billion.
As a result, trade surplus expanded to RM9.9 billion from RM9.1 billion a year ago.
Trading activities in the ringgit bond market improved this week. The total trade volume of the top 10 most actively traded bonds amounted to RM8.3 billion compared to RM3 billion last week. The five-year benchmark MGII paper maturing on April 14, 2022 topped the list with RM1.5 billion changed hands.
On January 2, 2018, BNM announced the tender details for the re-opening of the RM2 billion 20-year benchmark MGS maturing on April 7, 2037.
The tender closed on January 4, 2018 with a bid-to-cover ratio of 1.905 times.
The highest, average and lowest yield came in at 4.64, 4.607 and 4.573 per cent respectively.
On January 4, 2018, WCT Holdings Bhd issued a seven-year Islamic Medium Term Notes (IMTN) worth RM100 million.
The IMTN carries profit rate of 5.55 per cent and it is rated AA- IS with stable outlook by MARC.
On January 5, 2018, Edra Energy Sdn Bhd (EESB) issued 33 tranches of IMTNs that carry profit rates ranging from 5.61 to 6.71 per cent with tenure ranging from four to 20 years. The total issuance size is RM5.085 billion.
The IMTNs are rated AA3 with stable outlook by RAM Ratings.
EESB is an independent power producer that has signed a 21-year Power Purchase Agreement with Tenaga Nasional Bhd.
EESB was incorporated to design, construct, own, operate and maintain the largest gas power plant in Malaysia, with a capacity of 2,242 MW combined-cycle, gas-turbine power plant in Alor Gajah, Melaka.
On January 2, 2018, RAM Ratings revised the outlook on the AA3 rating of Bumitama Agri Ltd’s RM2 billion Islamic MTN Sukuk Musharakah (2014/2029) from stable to positive while reaffirming the rating.
The positive outlook reflects the issuer’s improved credit metrics which were believed to be sustainable on the back of continued improvement in the company’s operating performance.
On January 5, 2018, RAM Ratings lifted the negative Rating Watch on Premium Commerce Bhd’s Class A and Class B Notes under its Note Series 2016-A and concurrently reaffirmed the respective AAA and AA2 ratings of the Class A and Class B Notes with stable outlook.
The resolution of the negative Rating Watch was premised on bondholders’ approval of the issuer’s proposed resolution to extend the maturities of two of the five series under its Class A Notes.
The extension alleviated the concerns on increased liquidity risk arising from the marked deviation in the underlying portfolio’s default and prepayment performance relative to its earlier securitised portfolios.