Thursday, August 6

BPA Malaysia Weekly Bond Market Report


On Wednesday, China announced to impose retaliatory tariff of 25 per cent on US$16 billion worth of US imports.

The soon-to-be affected items included fuel, steel products, autos and medical equipment.

As to date, China has levied tariffs worth US$110 billion on US goods.

Followed by the intensifying trade spat between US and China, investors were cautious as there is no sign of resolution yet.

The ringgit bond market continue to stay bullish amid emerging market rout, especially on the Turkish front.

Yields in the corporate bond segment continued to drift lower.

As a result, Thomson Reuters BPA Malaysia All Bond Index increased 0.134 per cent to 159.713 points from 159.5 points on last Friday.

Despite increased demand for ringgit bonds, ringgit closed lower against the greenback at 4.0865, possibly caused by the cautious sentiment adopted by local investors.

Top 10 most active bonds:

The total trade volume of the top 10 most actively traded bonds fell to RM6.9 billion from RM10.4 billion last week.

The 10.5-year benchmark MGII maturing on 31 October 2028 continued to top the list with RM1.6 billion changed hands.

Sovereign auction(s):

Last week, BNM announced the tender details for the reopening of the RM2.5 billion 20-year benchmark GII maturing on August 4, 2037.

The tender closed on August 6, 2018 and garnered a solid bid-to-cover ratio of 2.108 times.

The highest, average and lowest yields came in at 4.784, 4.768 and 4.746 per cent respectively.

On August 10, 2018, BNM announced the tender details for the re-opening of the five-year benchmark MGS maturing on November 7, 2033 with an issuance size of RM3 billion.

The tender will close on August 14, 2018.

New issuance(s):

On August 8, 2018, Cagamas Bhd issued a one-year Islamic Medium Term Notes (IMTN) amounted to RM25 million with a profit rate of 3.95 per cent.

The IMTN is rated AAA and AAA IS respectively by RAM Ratings and MARC with stable outlook.

On 10 August 2018: Sabah Development Bank Bhd issued a three-year Medium Term Notes (MTN) amounted to RM75 million with coupon rate of 4.950 per cent.

The MTN is rated AA1 with stable outlook by RAM Ratings.

Perbadanan Kemajuan Negeri Selangor issued two tranches of thre-year and five-year MTNs with a combined issue size of RM300 million.

The MTNs carry a profit rate of five and 5.15 per cent respectively and are rated AA3 with stable outlook by RAM Ratings.