Malaysia Bond and Sukuk: Quarterly Report 1Q24

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1Q2024 – The momentum of Malaysia's bonds and sukuk remains steady, supported by expectations of declining global interest rates.

As Malaysia Capital Market grew to RM 3.8 trillion in 2023, the Malaysia bond and sukuk market also expanded to RM 2.0 trillion with total outstanding growing by 7.4%. The momentum of Malaysia bond and sukuk market grew steady contributed by an improved investor sentiment on the possibility of US interest rates having peaked and expected interest rate cuts in 2024. 


3-year yield for the US Treasury yields increased by 39 bps q-o-q. The yield on the benchmark 10-year Treasury notes has also gone up by 32 bps q-o-q. U.S. Treasury yields rose as solid economic data continued to add to expectations that the Federal Reserve could delay cutting interest rates to the July meeting or later.

MY Government Bond

The MGS yields experienced a quarterly increase, with the 3-year up by 1 basis points and the 10-year seeing a 11 basis points rise. The GII performance saw a decrease of 5 basis points for the 3-year while increased by 8 basis points for the 10-year. The volatility of the yield supported by current monetary policy stance remained supportive of the economy and is consistent with the current assessment of the inflation and growth prospects.

MY Corporate Bond & Sukuk

The corporate bond yields were mixed (q-o-q) throughout the first quarter of 2024. The yields were down 11 bps for 3-year and up by 1 bps for 10-year.
1Q24 Market Overview


The government bond auction for 1Q24 garnered an average BTC of 2.674x, an increase from the previous quarter (4Q23: 2.211x). A reopening of MGII 7/28 received the highest BTC at 4.402x. The new/reopening issuances for MGS/GII stood at RM42.0 billion (4Q23: RM37.0 billion).  

As of March 2024, the outstanding amount of MGS/GII was at RM1,162,157.73 billion (4Q23: RM1,171.58 billion). Investors decline in foreign holdings of Malaysian bonds is in line with expectations given the depreciating ringgit on the back of net inflows of foreign funds into the equity market.

In total, there were one (1) new issuance and nine (9) reopening of MGS and GII auctions in 1Q24.

1Q24 Government Bond Auction
Source BNM, BIX Malaysia
For the upcoming 2Q24, there will be two (2) new issue and two (2) reopening of MGS. For GII there will be four (4) reopening and one (1) new issue, totalling to nine (9) new issue and reopening.

1Q24 Government Bond Upcoming Issuance
Source BNM, BIX Malaysia


The foreign net flow to MGS and GII in 1Q24 amounted to –RM2.46 billion, –RM1.60 billion and RM2.16 billion respectively in January, February and March as foreign investors turn net seller. As of March 2024, the total foreign holdings of MGS and GII stood at RM251.69 billion (December 2023: RM253.59 billion), 0.76% decrease from the previous quarter. 

1Q24 Foreign Holdings of MGS and GII
Source BNM

1Q24 Cumulative  Net Foreign Flow to MGS and GII
Source BNM

RM34.04 billion corporate bonds and sukuk were issued in 1Q24 (4Q23: RM43.10 billion), 21.02 % decrease from the previous quarter. The AAA-rated bonds and sukuk were the most issued with RM11.39 billion issuances, followed by AA2/AA bonds at RM10.00 billion issuances.

For 1Q24, the largest corporate issuances were issued by MALAYAN BANKING BERHAD, MAYBANK SUBORDINATED SUKUK 4.030% 31.01.2034 of RM3.00 billion.


1Q24 Corporate Bond Issuance

There was zero (0) default and two (2) upgrades recorded in 1Q24. However, there is one (1) downgraded bonds/sukuk in this quarter.

⬆️ Upgrade
  1. Dar Al Arkan Real Estate Development Company
  2. PONSB Capital Berhad
⬇️ Downgrade
  1. YNH Property Berhad

1Q24 Rating Movements
Source: MARC, RAM and BIX Malaysia


Outstanding Amount by Bond Classes

As of March 2024, the outstanding amount of the Malaysian bond market stood at RM2.045 trillion, increased by 1.74% compared to the end of 4Q23 (December 2023: RM2.010 trillion). The largest outstanding bonds were from government issuances which consist of 58.30% of total issuances at RM1,192.16 billion, followed by corporate issuances of 24.84% at RM508.08 billion, and Quasi-government of 16.86% at RM344.77 billion.

1Q24 Outstanding Amount by Bond Class

Outstanding Amount by Principal and Bond Classes
As of March 2024, the outstanding amount of the Government conventional bond and the Government Islamic Bond (Sukuk) stood at RM618.35 billion and RM573.80 billion, respectively. The conventional Quasi-govt outstanding amount stood at RM22.37 billion compared to its Islamic counterpart that stood at RM322.40 billion. For corporate issuances, the conventional bond outstanding amounted RM113.01 billion while the corporate Sukuk was recorded higher at RM395.07 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.