Friday, August 14

BPA Malaysia Weekly Bond Market Report November 11 2012


On a week-on-week basis, the ringgit bond market slowed down as the Thom­son Reuters BPAM All Bond Index recorded only a minimal gain of 0.03 per cent from 129.47 last week to close at 129.51 this week.

Most of the market players stayed on the sidelines as they await the result of the MPC meet­ing released on Thursday.

In addition, there were no major reactions from market players following the success­ful re-election of Barack Obama as the US president during the presidential election held on Nov 6, 2012.

This is because the Congress and president are still tasked with reducing the massive US debt and solving the fiscal is­sues plagued by the US economy despite the result of the US elec­tions.

Bank Negara Malaysia (BNM) had decided to hold the Over­night Policy Rate at three per cent at the final MPC Meeting for year 2012, which was held on Nov 8, 2012.

In the Monetary Policy State­ment, BNM mentioned that the Malaysian economy is supported by the sustained expansion in domestic activities, which helps to offset the weaknesses in the external sector.

As for the headline inflation, it was expected to remain moderate for the remainder of 2012. There are upside risks to inflation in the future should there be sup­ply disruptions in commodities, which will result in higher global prices for commodities.

The top 10 most actively traded bonds this week is still domi­nated by sovereign papers with total trading volume of RM13.36 billion.

The bond with the highest trading volume for the week was the new 7.5-year GII benchmark bond, which was traded on a ‘when-issued’ basis and recorded a turnover of RM2.097 billion.

Looking at details of the new 7.5-year GII benchmark bond, On Nov 5, 2012, the government of Malaysia announced the auction of the new 7.5-year GII benchmark bond maturing in May 2020.

The new 7.5-year GII bench­mark bond is scheduled to be issued on Nov 12, 2012 and has an issuance size of RM3.5 billion.

The tender was closed on Nov 9, 2012 with a strong bid-to-cover ratio of 2.586 times.

Disclaimer: Information on this page is intended solely for the purpose of providing general information on the Ringgit Bond market and is not intended for trading purposes. None of the information constitutes a solicitation, offer, opinion, or recommendation by Bond Pricing Agency Malaysia Sdn Bhd (“BPAM”) to buy or sell any security, or to provide legal, tax, accounting, or investment advice or services regarding the profitability or suitability of any security or investment. Investors are advised to consult their professional invest­ment advisors before making any investment decision. Materials provided on this page are provided on an “as is” basis, and while care has been taken to ensure the accuracy and reliability of the information provided in this page, BPAM provides no warranties or representations of any kind, either express or implied, including, but not limited to, warranties of title or implied warranties of fitness for a particular purpose, accuracy, correctness, non-infringement, timeliness, completeness, or that the information is always up-to-date.