Malaysian Bond Market

Local govvies saw yields rise between 5-year to 20-year securities due to the weaker ringgit and lower 5-year CDS. Demand was dampened as investors were cautious ahead of the Fed’s FOMC meeting where a 25 bps rate hike was expected. At Friday’s 11am pricing, the 3-,5-, 7-, 10-, 15-, 20and 30-year benchmark Malaysian Government Securities yields settled at 3.26%, 3.55%, 3.83%, 3.87%, 4.32%, 4.51% and 4.71% respectively.

Trading activities eased this week compared to the previous week where benchmark local govvies registered a trading volume of RM8.3bil compared to the previous week’s value of RM15.5bil.

The secondary corporate bond market also recorded lighter trading activities compared to last week. Week to date, total trading volume was lower at RM1.38bil compared to last week’s RM1.39bil. About 60% of the trading volume was contributed by the GG/ AAA, 35% by the AA segment and the remaining 5% by the A segment.

In the GG/AAA segment, notable trades included ‘04/20 Danga Capital bond which recorded a total trading volume of RM171mil with yields 1 bps higher at 4.11%. Also garnering interest this week was 2019-2029 Aman Sukuk tranches recording a collective trading volume of RM129mil where yields traded mixed at 4.06%-4.78%. Meanwhile, Putrajaya Holdings tranches maturing 2018-2026 traded at mixed yields of 4.03%-4.56% with a collective trading volume of RM115mil. 2024-2039 DanaInfra Nasional tranches also garnered some interest with yields mixed at 4.17%5.07% with RM100mil changing hands.

Elsewhere in the AA segment, notable trades included ‘08/18 and ‘05/27 YTL Power International bonds whereby yields closed unchanged or lower at 4.23% and 4.97%, respectively with RM60mil changing hands. UniTapah tranches maturing 2024-2030 saw yields close lower at 4.59%-4.96% with a trading volume of RM40mil.