Government Bond Auction Results_21 May 2015

Results: MGS 5/35 New Issue

·         Solid auction bids. Today’s 20y MGS 5/35 auction drew keen interest with a bid/cover of 2.724 on MYR2b size. The high auction cover didn’t come as a surprise as the auction size is at the lower end of market’s expectation. The supply of long-duration MGS is not excessive and there is continued structural demand from pension funds and lifers. Small foreign participation was noted.

·         Successful bids average 4.254%, inside the pre-auction WI of around 4.27/20 and very close to the old 20y benchmark MGS 4/33 which was last done at around 4.25%.

·         Next on the auction calendar is the 7y re-opening of GII 7/22 with an estimated size of MYR3b.

Bid to cover:            2.724

Highest yield:           4.267%

Average yield:         4.254%

Lowest yield:           4.237%

Cut off:                   25%