BIX ARTICLE
Malaysia Bond and Sukuk: Quarterly Report 1Q2019
Jun 20, 2019
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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.
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. |
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. |
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. |
There are 0 upgraded and 3 downgraded issuers during 1Q19.
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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.