Tuesday, September 27

BPA Malaysia Weekly Bond Market Report: 7 Aug 2011

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The ringgit bond mar­ket attracted strong buying interest par­ticular in the government securities.

The All Bond Index Per­formance had a weekly gain of 0.34 per cent from 121.60 to 122.01 points mainly led by strong buying interest in government securities where the yield levels have dropped significantly from 2bps to 8bps throughout the week for two years up to 20-year MGS curve points.

The same interest was seen for government guar­anteed issuance where yields have dropped by 2-11bps for two years to 20-year curve points.

Lower yield translates to higher bond price.

The robust performance of the risk free notes was in tandem with ringgit appreciation where US$ dollar/ringgit once hit 2.94-2.95 during the intra-week interval.

As a result, all of the top 10 bonds traded during the week were MGS and GII as well as BNM notes, which are all sovereign papers.

New issues of the week included:

-Senari Synergy launched its debut issu­ance of RM 380 Million on Aug 2, 2011.

The issuance is rated as AAA due to the uncon­ditional and irrevocable guarantee provided by Danajamin for Senari Synergy RM 380 Mil IMTN programme.

That said, the credit rat­ing of Senari Synergy is determined based on the credibility of Danajamin in honouring the guarantee.

Senari Synergy’s new issuance ranges from two-year to seven-year sukuk with profit rate of 3.83 per cent to 4.62 per cent.

– Kencana Petroleum Bhd launched its debut issuance of RM500 million AA3 rated sukuk on Aug 5, 2011.

The profit rate for the five-year Kencana sukuk is 3.90 per cent.

RAM placed Kencana Petroleum Bhd’s AA3 rat­ing on rating watch with a developing outlook due to the recent M&A announce­ment where Integral Key Sdn Bhd extended its offer to acquire both Kencana and Sapura Crest.

– Another notable larger issuance of the week was Public Bank Bhd’s RM3 billion worth of AA1 rated 11 non-call six year sub­ordinated debts on Aug 3, 2011, with a coupon rate of 4.28 per cent.