Borneo Post Online: BPA Malaysia Weekly Bond Market Report

Borneo Post Online

BPA Malaysia Weekly Bond Market Report

Following the downward revision of this year’s economic growth forecast by Bank Negara last week, Moody’s Investors Service has cut Malaysia’s GDP growth forecast to 4.4 per cent from 4.7 per cent for this year and to 4.3 per cent from 4.5 per cent for 2020.

This lower growth rate is premised on the uncertainties in the global trade and the impact of China slowdown on Malaysia.

However, Moody’s noted that Malaysia will be able to service its debt even though its debt level has been consistently above the median.

The ringgit bond market continued to rally this week taking cue from the dovish stance by the Bank Negara Malaysia’s monetary policy from the previous week and the statement by Moody’s.

The belly to long end region of the MGS yield curve shed by two to five bps.

As such, the Thomson Reuters BPAM All Bond Index posted a gain of 0.27 per cent to end the week at 167.420 point from 166.969 point last Friday.

On Thursday, the Department of Statistic Malaysia reported that Malaysia’s exports dropped 5.3 per cent to MYR66.6 billion as compared to a year ago, while imports declined 9.4 per cent to RM55.5 billion year-on-year.

This had then recorded a trade surplus of RM11.1 billion.

Top 10 most active bonds:

The total traded amount of the top 10 most active bonds dropped to RM8.7 billion as compared to RM 11.1 billion last week.

The off-the-run MGS maturing on March 31, 2020 was the most active bond in the list with a total traded amount of RM1.7 billion.

Sovereign auction(s):

On April 3, BNM announced the tender details for the reopening of 15-year benchmark MSG maturing on November 7, 2033.

The tender closed on April 5, with a bid-to-cover ratio of 2.792 times.

The highest, average and lowest yields came in at 4.071, 4.065 and 4.058 per cent respectively.

The size of the tender issue was RM2.5 billion, in addition to RM1 billion to be privately placed with identified subscriber by Ministry of Finance.

New issuance(s):

On April 1, Danainfra Nasional Bhd issued 6 tranches of sukuk with combined issuance size of RM3.8 billion.

The tenures of these issuances range from seven-year to 29-year and carry profit rates from 4.03 per cent to 4.82 per cent.

The sukuk are government-guaranteed and hence exempted from rating.

On the same day, Perbadanan Kemajuan Negeri Selangor issued a three-year Islamic Medium Term Notes (IMTN) with an issuance size of RM50 million.

The sukuk bears a profit rate of 4.58 per cent and is rated AA3 with a stable outlook by RAM Ratings.

On April 5, Maybank Islamic Bhd issued a RM1 billion 10 non-call 5 year IMTN with profit rate of 4.5 per cent.

The IMTN is rated AA1 with a stable outlook by RAM Ratings.