During the week, market players remained cautious amidst concerns over global economic growth, uncertainty on the US-China trade and falling crude oil prices. As oil prices descended, the Malaysian ringgit depreciated to 4.19 against US dollar from 4.1775 last week.
The ringgit’s depreciation did not bode well in the ringgit bond market as evident by the rising yields across the MGS yield curve, as yields rose by approximately 2bp to 5bp from three-year to 30-year.
As a result, the Thomson Reuters BPAM All Bond Index posted losses of 0.048 per cent to close at 161.160 points.
On November 16, 2018, Bank Negara Malaysia (BNM) reported that Malaysia’s gross domestic product (GDP) growth slowed to 4.4 per cent in 3Q2018 from 4.5 per cent in the previous quarter.
Private sector activity continued to be the primary driver of growth as private consumption expanded following the zerorisation of Goods and Services Tax (GST) during the quarter.
The turnover in the top 10 most active bonds was a tad higher at RM5.2 billion from RM4.8 billion last week.
The re-opened seven-year benchmark GII paper maturing on August 15, 2025 topped the list with RM1 billion changed hands.
On November 12, 2018, BNM announced the tender details for the reopening of the 7-year benchmark GII maturing on August 15, 2025 which bears a profit rate of 4.128 per cent.
The reopening amount for the tender is RM3 billion with another RM2.5 billion to be privately placed. The tender closed on 14 November 2018 with a bid-to-cover ratio of 2.814 times.
The highest, average and lowest yield came in at 4.218, 4.212 and 4.203 per cent respectively.
On November 13, 2018, Pac Lease Bhd issued a 1.5-year Medium Term Notes (MTN) with a coupon rate of 4.40 per cent.
The RM85 million issuance is rated AA3 with stable outlook by RAM Ratings.
On November 15, 2018, Ambank (M) Bhd issued a RM1 billion 10-non-call-five-year subordinated notes with a coupon rate of 4.98 per cent.
The issuance is rated AA3 with stable outlook by RAM Ratings.
On November 9, 2018, RAM Ratings upgraded the ratings of Al-Dzahab Assets Bhd’s Class B Sukuk.
Concurrently, the rating agency has reaffirmed the AAA rating for all tranches of the Class A Sukuk based on the premise of robust credit support available which commensurate with an ‘AAA’ stress scenario.
The rating upgrade for all tranches of the Class B Sukuk is premised on their richer credit support, to a level supportive of a higher stress scenario under the revised ratings, primarily because of RAM’s revised default and prepayment assumptions for underlying portfolios.
The positive outlook on the Tranche 5 Class B Notes reflects RAM Rating’s expectation that its asset cover will improve to a level that corresponds to an AAA rating in the near term – if it maintains its current performance.