Trade tensions between US and China has dissipated gradually this week after China President Xi Jinping’s speech in the Boao Forum on Tuesday.
During the speech, President Xi reiterated that China will open up its trade borders and lower import tariffs on certain products like car.
However, ringgit bond market remained muted to the positive progress between US and China, partly due to the concerns over the upcoming 14th Malaysian general election.
On Wednesday, the release of the Federal Open Monetary Committee (FOMC) minutes revealed a more hawkish tone as all of the Federal Reserve’s policymakers opined that the economic outlook had strengthened in the recent months with the expectations that inflation would rise in the near term.
In addition, almost all the policymakers in the FOMC meeting considered the gradual rate hikes as appropriate.
Following the release of the FOMC meeting as well as the heightened geopolitical tension in the Middle East, market players in ringgit bond market turned to risk-off sentiment and sent the Thomson Reuters BPAM All Bond Index lower by 0.106 per cent to 157.603 points compared to 157.771 points last week.
Top 10 most active bonds:
The trade volume in ringgit bond market this week remained unchanged compared to last week with a total of RM5.8 billion worth of transactions done in the market.
The 5-year benchmark paper maturing on April 14, 2022 recorded the highest trade volume of RM1.1 billion.
Sovereign auction(s):
On April 10, 2018, BNM announced the details for the reopening of the 20-year benchmark GII maturing on August 4, 2037.
The reopening amount for the tender is RM2.5 billion. The tender closed on April 12, 2018 with a bid-to-cover ratio of 2.118 times.
The highest, average and lowest yield came in at 4.827, 4.804 and 4.790 per cent respectively.
New issuance(s):
On April 9, 2018, Public Bank Bhd issued two tranches of senior medium term notes (MTN) with a total issuance size of RM1.8 billion.
The five-year MTN carries a coupon rates of 4.45 per cent while the seven-year MTN carries a coupon rate of 4.60 per cent. These bonds are rated AAA with stable outlook by RAM Ratings.
On April 10, 2018, TSH Sukuk Ijarah Sdn Bhd issued a five-year sukuk with a profit rate of 5.10 per cent.
The sukuk has an outstanding amount of RM30 million and is rated AA-IS with stable outlook by MARC.