Fixed Income Daily Pulse, 23 April 2015

The day’s trade recap (from our trading desk):

·         Local govvies were pretty much muted in the morning session as the market refrained from buying after UST yields rose as high as 1.99% overnight from 1.89% yesterday before retreated back to 1.95%. However, post-lunch saw buying activity after the signal from Bank Negara Governor Zeti that there is no need for a Malaysian rate cut in the near future despite the fundamental economic slowdown. This didn’t stop the curve from steepening as front end yields eased lower from foreign buying interest mainly to run carry trades due to lower implied funding. Over the GG/AAA segment, a slew of DanaInfra Nasional bonds maturing at 2025-2045 traded mixed at a range of 4.33%-4.98%, with RM305m changed hands. Meanwhile, Manjung Island ‘11/23 declined 1 bp to trade at 4.36%. Elsewhere in the AA segment, notable trade saw in the FI industries are CIMB Bank ‘09/18 and ‘11/17, which the yields traded 1 and 5 bps lower to 4.63% and 4.50%, respectively.    MGS Benchmark Issues MGS Closing Level (%) Chg (bp) Vol (RM m) 3-yr 3.300 -4.5 324 5-yr 3.610 -0.5 449 7-yr 3.750 0.0 60 10-yr 3.850 -0.5 234 15-yr 4.045 0.0 0 20-yr 4.180 0.0 1 30-yr 4.560 0.0 20 IRS Closing Rates IRS Closing Yld (%) Chg 1-yr 3.625 0.5 3-yr 3.650 -0.5 5-yr 3.785 0.0 7-yr 3.960 1.0 10-yr 4.120 0.5