Borneo Post Online, 14 June 2014 - BPA Malaysia weekly bond market report 15 June 2014

Borneo Post Online, 14 June 2014

The TR BPAM All Bond Index rose 0.13 per cent to end the week at a reading of 134 from 133.82 last week. On a week-on-week basis, Government securities, which dictate most of the Index movements, fell up to 14 basis points (bps), especially the longer-dated papers.

Long term MGS yields fell the most on Friday, as the yields of long term US Treasuries eased by about six to seven bps on Thursday.

Trading volume remained relatively thin throughout the school holiday week and as market players await the FOMC meeting next week for more trading impetus.

The trading volume for the top 10 most active bonds came in at RM8.05 billion.

The short-term Bank Negara Monetary Notes maturing on Sept 11, 2014 topped the list with RM2.18 billion changed hands. The reopened seven-year benchmark GII was the second most actively traded bond during the week with RM1.35 billion changed hands.

On June 10, 2014, the Government of Malaysia announced the reopening tender for the seven-year benchmark GII maturing in March 2021 with an issuance amount of RM3 billion.

The tender closed on June 12, 2014 with a decent bid-to-cover ratio of 2.345 times.

The highest, average and lowest yields came in at 4.122 per cent, 4.112 per cent and 4.097 per cent.

On June 9, 2014, Pengurusan Air SPV Bhd issued a three and five-year sukuk.

The sukuk, which are rating-exempted by virtue of the explicit guarantee given by the Government of Malaysia, have profit rates of 3.87 and 4.06 per cent respectively.

On the same day, Public Islamic Bank Bhd issued its very first Basel III-compliant subordinated sukuk with a profit rate of 4.75 per cent.

The 10-non-call-five year subordinated sukuk was assigned a rating of AA1 by RAM Ratings.

On June 12, 2014, IJM Corporation Bhd issued an eight-year IMTN with an issuance size of RM300 million. The IMTN, which is rated AA3 by RAM Ratings, has a profit rate of 4.83 per cent.

Also on the same day, Tropicana Corporation Bhd (formerly Dijaya Corporation Bhd), issued two bond tranches guaranteed by RHB Bank Bhd and AmBank Bhd respectively, with an issuance size of RM20 million and RM10 million each. Both bonds offer a coupon rate of 4.6 per cent and are rated AA2(bg) by RAM Ratings.

On June 10, 2014, RAM Ratings reaffirmed Eversendai Corporation Bhd’s RM500 million sukuk Musharakah ICP/IMTN programme but revised the outlook from stable to negative.