BPA Malaysia weekly bond market report 11 March 2018

Market players were mostly remained on the sidelines this week due to the uncertainties in the global market as a result of an emerging trade war.

As such, the Thomson Reuters BPAM All Index recorded a modest gain of 0.131 per cent and closed at 157.246 points from 157.041 points last Friday. The gain was mainly contributed by sovereign segment, which strong buying interests were seen on Wednesday following the announcement of unchanged OPR by .

On Wednesday, Bank Negara decided to maintain the Overnight Policy Rate (OPR) at 3.25 per cent in the second Monetary Policy Committee (MPC) meeting this year.

In the MPC statement, BNM said the local economic is expected to be supported by positive outlook and spillovers from the external sector to the domestic economy.

On the price front, headline will be dependent on future global oil prices which remain highly uncertain while core is projected to moderate due to improving labour productivity and ongoing investments for capacity expansion.

On the same day, Bank Negara Malaysia released the data of Malaysia’s international reserves as at February 28, 2018, which was remained the same as previous month’s level at US$103.7 billion.

The reserves position is sufficient to finance 7.2 months of retained imports and is 1.1 times the short-term external debt.

Other data released during the week included the trade data of Malaysia in 2018, which exports reported a double-digit growth of 17.9 per cent to RM82.9 billion.

Manufacturing goods was the main driver of the growth, which registered a y-o-y growth of 20.4 per cent, followed by mining and agriculture goods, which recorded a y-o-y growth of 8.5 per cent and 6.2 per cent respectively. On the other hand, imports expanded by 11.6 per cent y-o-y to RM73.2 billion, resulting in a trade surplus of RM9.7 billion.

The trading activities in ringgit bond market slowed down this week with RM8.7 billion transacted for the top 10 most actively traded bonds.

The volume was 28 per cent lesser than last week. The 10-year benchmark MGS paper maturing on November 16, 2027 topped the list with RM1.7 billion changed hands.

On March 6, 2018, BNM announced the tender details for the reopening of the RM1.5 billion 30-year benchmark GII maturing on May 8, 2047, with an additional RM1 billion to be privately placed. The tender closed on March 8, 2018 with a decent bid-to-cover ratio of 2.071 times.

The highest, average and lowest yield came in at 4.955 per cent, 4.930 per cent and 4.890 per cent respectively.

On March 9, 2018, BNM announced the tender details for the new issue of the RM3 billion seven-year benchmark MGS maturing on March 14, 2025 with an additional RM1 billion to be privately placed. The tender will close on March 13, 2018.

On March 8, 2018, Prasarana Malaysia Bhd issued five tranches of with tenures ranging from seven years to 25 years. On March 9, 2018, Gas Malaysia Bhd issued a three-year with an issuance size of RM30 million. The carries a profit rate of 4.43 per cent and is rated AAA IS with stable outlook by .

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Source: Borneo Post Online

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