BPA Malaysia weekly bond market report 17 December 2017

The US Federal Reserve (Fed) raised its benchmark interest rate by 25 basis points to a target range of 1.25 per cent to 1.5 per cent during its December Federal Open Market Committee (FOMC) meeting.

This third rate hike of the year, which was widely expected by the market, was buoyed by the solid economy growth and strong labor market.

Meanwhile, the Fed noted that expected will remain below its target rate while indicating three more next year.

Investors were on cautious mode throughout most of the week awaiting the Fed’s policy decision, as well as the outcomes from European (ECB) and Bank of England (BoE) meetings, which had left its interest rates unchanged.

The Ringgit weakened slightly against the greenback over the week to close at 4.0865 from 4.0855 last Friday.

The MGS curve flattened as the two-year and below region saw yields inched higher by up to seven bps while yields from three-year onwards eased by up to five bps.

As such, the Thomson Reuters BPAM All Index recorded a gain of 0.091 per cent to end the week at 155.552 points.

The total trade volume of the top 10 most actively traded bonds declined to RM5.9 billion from RM7 billion last week.

The short term MGS maturing on 28 September 2018 topped the list with RM1.4 billion changed hands.

On December 14, 2017, the tender for the RM2 billion new 15.5-year benchmark MGII maturing on 15 June 2033 closed with bid-to-cover ratio of 1.775 times.

The highest, average and lowest yield came in at 4.79, 4.724 and 4.668 per cent respectively.

On December 11, 2017, UEM Sunrise Bhd issued three tranches – three-year, five-year and seven-year Islamic Medium Term Notes (IMTN) with a combined issue size of RM600 million.

The IMTNs carry a profit rates of 4.8, 5.06 and 5.32 per cent respectively and are rated AA- IS with a stable outlook by .

On December 13, 2017, Cagamas Bhd issued a five-year MTN with coupon rate of 4.25 per cent.

Lafarge Cement Sdn Bhd issued a three-year IMTN with issuance size of RM100 million and bears profit rate of five per cent.

Westports Sdn Bhd issued three tranches (four-year, five-year and 10-year) of IMTN which amounted to RM150 million.

On December 14, 2017, Maybank Islamic Bhd issued an Additional Tier 1 perpetual bond with a non-call period of five years.

RAM Ratings assigned a AA3 credit rating with a stable outlook for this perpetual bond.

On December 15, 2017, Berjaya Land Bhd issued a one-year bank guaranteed bond and a one-year Danajamin guaranteed bond with a total issuance size of RM225 million.

Cagamas Bhd issued two tranches – one-year and three-year MTNs with a combined issuance size of RM100 million.

On December 15, 2017, RAM Ratings has placed Alliance Bank Malaysia Bhd’s (the Group) A1/P1 financial institution ratings and the ratings of its outstanding debt instruments on a positive outlook.

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Source: Borneo Post Online

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