Malaysia Bond and Sukuk: Quarterly Report 3Q2023

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BIX Malaysia - Quarterly Report 3Q 2023

3Q2023 – Malaysia remained volatile as markets continue to price in the endgame of tightening cycle by global central banker.

In the third quarter of this year, the yield curve for Malaysian bonds remained volatile as markets continue to price in the endgame of tightening cycle by global central banker, amid renewed risks to the inflation outlook and ongoing geopolitical tensions. A slower-than-anticipated economic recovery in China alongside a prolonged period of restrictive monetary policy across developed markets, in particular, suggest a more challenging global growth prospects for 2H23 and beyond, implying more cautious risk sentiment ahead.


3-year yield for the US Treasury rose by 31 bps q-o-q. The yield on the benchmark 10-year Treasury notes has also risen by 78 bps q-o-q. The high-yield, short-term bonds kept afloat during the third quarter, while the rest of the fixed-income market took a hit from the Fed’s higher-for-longer stance on interest rates.

MY Government Bond

The MGS yield rose q-o-q, where the 3-year was up by 5 bps and the 10-year increased by 12 bps. GII performance also rose, the q-o-q increase across by 12 bps for both the 3-year and 10-year. This is due to the economic conditions, global trends, inflation rates, geopolitical factors, and upcoming regulatory reforms that may impact capital markets.

MY Corporate Bond & Sukuk

The corporate bond yields were mixed (q-o-q) throughout the third quarter of 2023. The yields up by 1 bps for 3-year and remained unchanged as previous quarter for 10-year. The advanced and emerging economies’ mixed stances on monetary policy could lead to capital flow fluctuations and increased volatility in bond markets.
3Q23 Market Overview


The government bond auction for 3Q23 garnered an average BTC of 2.125x, an increase from the previous quarter (2Q23: 2.059x). A reopening of MGS 11/33 received the highest BTC at 2.641x. The new/reopening issuances for MGS/GII stood at RM42.0 billion (2Q23: RM36.0 billion).  

As of September 2023, the outstanding amount of MGS/GII was at RM1,091.66 billion (2Q23: RM1,063.66 billion). This is due to the government’s deficit financing requirement and the refinancing of debts maturing this year.

In total, there were zero (0) new issuance and ten (10) reopening of MGS and GII auctions in 3Q23.

3Q23 Government Bond Auction
Source BNM, BIX Malaysia
For the upcoming 4Q23, there will be four (4) reopening of MGS. For GII there will be four (4) reopening, totalling to eight (8) reopening.  

3Q23 Government Bond Upcoming Issuance
Source BNM, BPAM, BIX Malaysia


The foreign net flow to MGS and GII in 3Q23 amounted to RM9.39 billion, –RM5.85 billion and –RM0.08 billion respectively in July, August and September as foreign investors turn net buyer. As of September 2023, the total foreign holdings of MGS and GII stood at RM252.13 billion (June 2023: RM248.68 billion), 1.39% increase from the previous quarter.  

3Q23 Foreign Holdings of MGS and GII
Source BNM

3Q23 Cumulative  Net Foreign Flow to MGS and GII
Source BNM

RM78.45 billion corporate bonds and sukuk were issued in 3Q23 (2Q23: RM69.72 billion), 12.52% increase from the previous quarter. The not rated bonds and sukuk were the most issued with RM45.08 billion issuances, followed by AA2/AA bonds at RM11.18 billion issuances.

For 3Q23, the largest corporate issuances were issued by SARAWAK ENERGY BERHAD, SEB IMTN 4.270% 04.07.2033 (Tranche 21) of RM2.00 billion.


There was zero (0) default and two (2) upgrades recorded in 2Q23. However, there is one (1) downgraded bonds/sukuk in this quarter.

⬆️ Upgrade
  1.  MBSB Bank Berhad
  2. Segi Astana Sdn Bhd
  3. Celcom Networks Sdn Bhd
  4. Cenergi SEA Berhad
  5. UEM Group Berhad
⬇️ Downgrade
  1. Country Garden Real Estate Sdn Bhd
  2. TG Excellence Berhad

3Q23 Rating Movements
Source: MARC, RAM and BIX Malaysia


Outstanding Amount by Bond Classes

As of September 2023, the outstanding amount of the Malaysian bond market stood at RM1.99 trillion, increased by 1.53% compared to the end of 2Q23 (June 2023: RM1.96 trillion). The largest outstanding bonds were from government issuances which consist of 57.49% of total issuances at RM1,142.16 billion, followed by corporate issuances of 25.05% at RM497.63 billion, and Quasi-government of 17.46% at RM346.88 billion.

3Q23 Outstanding Amount by Bond Class

Outstanding Amount by Principal and Bond Classes
As of September 2023, the outstanding amount of the Government conventional bond and the Government Islamic Bond (Sukuk) stood at RM580.36 billion and RM561.80 billion, respectively. The conventional Quasi-govt outstanding amount stood at RM23.66 billion compared to its Islamic counterpart that stood at RM323.22 billion. For corporate issuances, the conventional bond outstanding amounted RM116.79 billion while the corporate Sukuk was recorded higher at RM380.84 billion.

This report has been prepared and issued by Bond and Sukuk Information Platform Sdn Bhd (“the Company”). The information provided in this report is of a general nature and has been prepared for information purposes only. It is not intended to constitute research or as advice for any investor. The information in this report is not and should not be construed or considered as an offer, recommendation or solicitation for investments. Investors are advised to make their own independent evaluation of the information contained in this report, consider their own individual investment objectives, financial situation and particular needs and should seek appropriate personalized financial advice from a qualified professional to suit individual circumstances and risk profile.

The information contained in this report is prepared from data believed to be correct and reliable at the time of issuance of this report. While every effort is made to ensure the information is up-to-date and correct, the Company does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information contained in this report and accordingly, neither the Company nor any of its affiliates nor its related persons shall not be liable in any manner whatsoever for any consequences (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) of any reliance thereon or usage thereof.