Malaysia Bond and Sukuk: Quarterly Report 4Q2023

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BIX Malaysia - Quarterly Report 4Q 2023

4Q2023 – The Malaysian capital market successfully navigates through global volatility in the year 2023.

The Malaysian bond and sukuk market, a significant player in the region, is well-equipped to support important financing for productive and socially responsible projects. As of October 31, 2023, its total value stands at RM2.0 trillion, constituting over 50% of Malaysia's capital market. Malaysia leads globally in sukuk, holding 35% of the total outstanding sukuk, surpassing Saudi Arabia and Indonesia. 


3-year yield for the US Treasury yields declined by 79 bps q-o-q. The yield on the benchmark 10-year Treasury notes has also dropped by 71 bps q-o-q. U.S. This adjustment is attributed to a response to persistent inflation and robust labor market data and potential escalation of the conflict between Israel and Hamas.

MY Government Bond

The MGS yields experienced a quarterly decline, with the 3-year decreasing by 6 basis points and the 10-year seeing a 23 basis points drop. The GII performance also saw a decrease of 11 basis points for the 3-year and 23 basis points for the 10-year. This is attributed to a reduction in foreign selling of bonds, which has been observed since late October where is linked to the persistently hawkish stance of the US Federal Reserve and the unexpectedly robust growth of the US economy.

MY Corporate Bond & Sukuk

The corporate bond yields decrease (q-o-q) throughout the fourth quarter of 2023. The yields down 13 bps for 3-year and 25 bps for 10-year.
4Q23 Market Overview


The government bond auction for 4Q23 garnered an average BTC of 2.211x, an increase from the previous quarter (3Q23: 2.125x). A reopening of MGII 09/30 received the highest BTC at 3.304x. The new/reopening issuances for MGS/GII stood at RM37.0 billion (3Q23: RM42.0 billion). 

As of December 2023, the outstanding amount of MGS/GII was at RM1,171.58 billion (3Q23: RM1,091.66 billion). This is because the government aims to minimize refinancing risk by decreasing funding through short-term papers, despite T-bills constituting less than 3% of the overall outstanding ringgit government debts.
In total, there were zero (0) new issuance and eight (8) reopening of MGS and GII auctions in 4Q23

4Q23 Government Bond Auction
Source BNM, BIX Malaysia
For the upcoming 1Q24, there will be four (4) reopening of MGS. For GII there will be four (4) reopening and one (1) new issue, totalling to nine (9) new issue and reopening.

4Q23 Government Bond Upcoming Issuance
Source BNM, BPAM, BIX Malaysia


The foreign net flow to MGS and GII in 4Q23 amounted to –RM1.84 billion, RM5.59 billion and –RM2.29 billion respectively in October, November and December as foreign investors turn net buyer. As of December 2023, the total foreign holdings of MGS and GII stood at RM253.59 billion (September 2023: RM252.13 billion), 0.58% increase from the previous quarter. 

4Q23 Foreign Holdings of MGS and GII
Source BNM

4Q23 Cumulative  Net Foreign Flow to MGS and GII
Source BNM

RM43.10 billion corporate bonds and sukuk were issued in 4Q23 (3Q23: RM78.45 billion), 45.06% decrease from the previous quarter. The not rated bonds and sukuk were the most issued with RM10.31 billion issuances, followed by AA2/AA bonds at RM13.09 billion issuances.

For 4Q23, the largest corporate issuances were issued by SIME DARBY ENTERPRISE SDN. BHD, SDESB IMTN 11.12.2024 - Tranche 1B of RM2.50 billion.


4Q23 Corporate Bond Issuance

There was zero (0) default and four (4) upgrades recorded in 4Q23. However, there are three (3) downgraded bonds/sukuk in this quarter.

⬆️ Upgrade
MBSB Bank Berhad
  1. Titijaya Land Berhad
  2. Manulife Holdings Berhad
  3. Golden Assets International Finance Limited
  4. AMMB Holdings Berhad
⬇️ Downgrade
  1. YNH Property Berhad
  2. SPR Energy (M) Sdn Bhd
  3. Country Garden Real Estate Sdn Bhd

4Q23 Rating Movements
Source: MARC, RAM and BIX Malaysia


Outstanding Amount by Bond Classes

As of December 2023, the outstanding amount of the Malaysian bond market stood at RM2.01 trillion, increased by 1.01% compared to the end of 3Q23 (September 2023: RM1.99 trillion). The largest outstanding bonds were from government issuances which consist of 57.67% of total issuances at RM1,159.86 billion, followed by corporate issuances of 25.39% at RM510.71 billion, and Quasi-government of 16.94% at RM340.76 billion.

4Q23 Outstanding Amount by Bond Class

Outstanding Amount by Principal and Bond Classes
As of December 2023, the outstanding amount of the Government conventional bond and the Government Islamic Bond (Sukuk) stood at RM603.56 billion and RM556.30 billion, respectively. The conventional Quasi-govt outstanding amount stood at RM23.59 billion compared to its Islamic counterpart that stood at RM318.16 billion. For corporate issuances, the conventional bond outstanding amounted RM113.93 billion while the corporate Sukuk was recorded higher at RM396.77 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.