Malaysia Bond and Sukuk: Quarterly Report 1Q2022

Malaysia Bond and Sukuk: Quarterly Report 1Q2022

1Q2022 – Malaysian government bonds and sukuk remained robust despite the heightened expectations of an interest rate hike.

Foreign investors remained net buyers in the Malaysian bond market this quarter amid the rising inflationary pressure from the Russia-Ukraine War and even more FED rate hike. Bank Negara Malaysia (BNM) is  expected to adjust the monetary policy settings, increasing OPR.


3-year yield for the US Treasury  rose to 148 bps q-o-q while the yield on the benchmark 10-year Treasury note rose 80 bps q-o-q. Investors might fret over concerns of rising inflation and tighter monetary policy.

MY Government Bond

The MGS yield increased q-o-q, where the 3-year was up by 38 bps and the 10-year rose by 25 bps. As for GII performance, the q-o-q increase across the curve by 5 bps for 3-year and 38 bps for 5-year. Bank Negara is expected to raise the overnight policy rate by the second half of 2022.

MY Corporate Bond & Sukuk

The corporate bond yields show fluctuations (q-o-q) throughout the first quarter of 2022. The yields rose 13 bps for 3-year and 26 bps for 10-year
1Q22 Market Overview


The government bond auction for 1Q22 garnered an average BTC of 1.918x, a slight decrease from the previous quarter (4Q21: 1.994x). A reopening of GII 07/36 received the highest BTC at 2.574x. The new/reopening issuances for MGS/GII stood at RM 40.5 billion (4Q21: RM 40.86 billion). 

As of March 2022, the outstanding amount of MGS/GII was at RM926.34 billion (4Q21: RM 903.32). The demand for MGS and GII for quarter 1 was still strong as risk-off sentiment amid the possible OPR hike by BNM.

1Q22 Government Bond Auction
Source BNM, BIX Malaysia
There will be ten reopening MGS and GII auctions in 2Q22.  

1Q22 Government Bond Upcoming Issuance
Source BNM, BPAM, BIX Malaysia


The foreign inflow to MGS and GII tapered off in 1Q22 with net inflow amounted to RM4.28 billion, RM2.15 billion and -RM4.14 billion respectively in January, February, and March, despite foreign investors remain net buyers. As of March 2022, the total foreign holdings of MGS and GII stood at RM236.25 billion (December 2021: RM 233.96 billion), 1% increase from the previous quarter. 

In the near term, foreign investors could overweight on Malaysian bonds to seek cover as it seems to be offering the best profile to ride out the Russian-Ukraine war and the possibility of FED rate hike.

1Q22 Foreign Holdings of MGS and GII1Q22 Cumulative  Net Foreign Flow to MGS and GII

RM 20.85 billion corporate bonds and sukuk were issued in 1Q21 (4Q21: RM 49.13 billion), 58% decrease from last quarter. The government guaranteed rated bonds and sukuk were the most issued with RM 4.35 billion issuances. Non-rated bond is the second most issued with RM 3.92 billion issuances.

By ratings (excluding government-guaranteed and non-rated), AAA-rated bonds were the most issued with RM 3.92 billion issuance (4Q21: RM 9.13 billion). The second big issuance was AA1/AA+-rated with RM 2.25 billion issuance (4Q21: RM 8.13 billion)

For this quarter, the largest corporate issuance is Kuala Lumpur Kepong Berhad, KLK IMTN 4.170% 16.03.2032 of RM 1.5 billion.

1Q22 Corporate Bond Issuance
Source BNM, BIX Malaysia

In 1Q22, there is no defaulted or upgraded bonds/sukuk. However, there are three downgraded bonds/sukuk in this quarter.
  1. Menara ABS Berhad
  2. Alpha Circle Sdn. Bhd
  3. Maju Expressway II Sdn Bhd. (MEX II)

1Q22 Rating Movements
Source: MARC, RAM and BIX Malaysia


Outstanding Amount by Bond Classes

As of March 2022, the outstanding amount of the Malaysian bond market was at RM 1.77 trillion. ( December 2021: RM 1.74 trillion). Breakdown by bond classes, the outstanding amount for government issuances stood at RM 926.34 billion. The corporate and quasi-government outstanding amounts were at RM 515.58 billion and RM 327.54 billion, respectively.

1Q22 Outstanding Amount by Bond Class

Outstanding Amount by Principal and Bond Classes
The outstanding amount of the Government conventional bond was at RM 493.04 billion and the Government Islamic Bond (Sukuk) at RM 433.3 billion, as of March 2022. The conventional Quasi-govt outstanding amount stood at RM 19.05 billion whereas its Islamic counterpart stood at RM 308.49 billion. For corporate issuance, the conventional bond outstanding amount was at RM 133.32 billion and its Islamic sukuk was at RM 382.36 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.
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