Friday, May 24

BPA Malaysia Weekly Bond Market Report 8 December 2013

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The TR BPAM All Bond Index recorded a loss of 0.29 per cent over the week to close at 131.08 from 131.46 last week.

The losses were mainly due to the higher average yield of the new 15-year benchmark GII tender despite garnering a strong bid-to-cover ratio of 2.87-fold.

The losses were also contributed by the higher yields of the other Malaysian Government Securities (MGS) and GII benchmark papers, as they moved in tandem with the bearish performance of the US Treasuries with market players being increasingly concerned that the US Federal Reserve will being tapering soon following the better-than-expected Automatic Data Processing employment report in November and higher new home sales in October.

The total trade volume of the top 10 most active bonds shed 21.2 per cent compared with last week’s record of RM8.9 billion. Short-term Bank Negara Malaysia (BNM) papers maturing in January 2014 topped the list with RM1.1 billion changing hands.

On December 2, 2013, Konsortium Lebuhraya Utara-Timur (KL) Sdn Bhd issued 15 senior sukuk and one junior bond with a total issuance size of RM2.48 billion.

The proceeds of this issuance was mainly used to early redeem the existing senior sukuk and junior bond as well as to part-finance the construction costs, development costs, financing costs, fees and expenses.

On the same day, Premium Commerce Bhd issued five tranches of Class A and B bonds, which are rated AAA and AA2 respectively by RAM Ratings.

The bonds, which have a total nominal value of RM300 million, are rated AAA (FG) by MARC, reflecting the unconditional and irrevocable financial guarantee provided by Danajamin Nasional Bhd.

On December 3, 2013, BNM announced the tender for the new 15-year benchmark GII with an issuance size of RM2 billion. The tender closed on December 5, 2013 with a strong bid-to-cover ratio of 2.87-fold, the third highest ratio recorded for the sovereign bond auctions held this year.

The lowest, average and highest yields were 4.855, 4.943, and 4.980 per cent respectively.

On the late evening of last Friday (November 29, 2013), RAM Ratings had upgraded the financial institution ratings of AmBank (M) Bhd (Ambank), AmIslamic Bank Bhd (AmIslamic) and AmInvestment Bank Bhd, from AA3/Positive/P1 to AA2/Stable/P1.

Concurrently, the long-term issue ratings of AmBank and its funding conduit, AmPremier Capital Bhd, have been upgraded, as have those of AmIslamic and AMMB; the ratings have a stable outlook.