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Malaysia Bond and Sukuk: Quarterly Report 1Q2019


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Malaysia Bond and Sukuk: Quarterly Report 1Q 2019

1Q2019 – Bank Negara Malaysia (BNM) cuts OPR

BNM cuts the OPR rate by 25bps to 3% on the concern of slowing global growth. The Fed decision to pause its rate hike leads to demand in the emerging market including Malaysia with 4.52% increase in bond foreign holding over the quarter.
Malaysia Government Security (MGS) and Government Islamic Instrument (GII) yields show improvement over the quarter except for MGS 10y tenure as yield rises 70 basis point from the previous quarter.

GLOBAL MARKET
Overview

The US treasuries 10y yield ended at 2.41% with 28 basis point decrease compared to the previous quarter. For 1Q19, US Treasuries and other government bonds rallied on global growth concern.

MY Government Bond
Overview

The 10y MGS ended weak at 3.77% with 70 basis point increase. Overall, MGS/GII showed significant improvement over the quarter with basis point range between 19bps-43bps throughout different tenures.

MY Corporate Bond & Sukuk
Overview

Corporate bond and sukuk yields in the AAA spectrum strengthen during 1Q19 with the robust secondary market. 1Q19 issuance slightly increased by 0.14% at RM29.04b compared to RM29.0b issuance in 4Q18.
Market Overview
  

GOVERNMENT BOND AUCTION
Overview
Total Government bond new and reopening auction issued at 28.5 billion during 1Q19. The average BTC for the quarter is decent at 2.74x, higher than 4Q18 which was at 2.29x. The 10.5-year GII 7/29 has the highest BTC at 4.067x while the 30-year MGS 7/48 has the lowest BTC at 1.718x. The issuance of MGS/GII is expected to decline on the rise of Samurai bond issuance. Overall, the demand for government bond auction throughout the quarter is strong and solid. 

1Q19 AUCTION
1Q19 Government Auction
There will be 4 auctions of MGS and 4 auctions of GII for the next quarter. Meanwhile, 16 GII will be maturing in 2Q19 amounting to 12.24 billion.





UPCOMING ISSUANCE 2Q2019

1Q19 Upcoming Government Issuance

CORPORATE BOND & SUKUK
Overview 

Malaysia Corporate Bond and Sukuk issuance in 1Q19 amounted to RM29.04 billion, 0.4 billion higher than 4Q18. However, it is lower than last year issuance in the same quarter which was at RM29.6 billion. The increase in issuance is driven by the demand for EM assets due to OPR cuts down to 3.00% from 3.25% as well as due to the rate pause outlook in the US.






ISSUANCE 1Q2019

Corporate Issuance 1Q2019

RATING OUTLOOK
 
There are 0 upgraded and 3 downgraded issuers during 1Q19.
 
Downgrade
  1. Quantum Solar Park (Semenanjung) Sdn Bhd
  2. Cendana Sejati Sdn Bhd
  3. Murud Capital Sdn Bhd










Rating Movement
 
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Disclaimer

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 personalised 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.