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.
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