Fixed Income Daily Pulse, 22 June 2015

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

· The week started off tilted towards a bullish side post rally last week. There was a strong buying interest in 7-year and 10-year MGS during the day where it eased 2 bps and 1.5 bps on the MGS curve.  MGS ‘10/17 remained as the outperformers during the day with RM670m done, eased by 4.5 bps on the curve. The same foreign name is still buying up the short end bonds. On the other hand, there is some selling pressure on the 5-year MGS in which the bids was given continuously as it was shifting leftwards which resulted in the 5-year gaining 3 bps on the curve. Volume traded in the GII space remained light nevertheless 7-year GII emerged as the star as it kept up with its MGS counterpart with RM120m traded and easing off 3 bps over the day, seeing good buying interest from local Islamic banks. In the GG/AAA segment, PLUS ‘01/28 and ‘01/29  increased 3 bps and 2 bps higher at 4.60% and 4.66% with a total trading volume of RM60m. Malaysia Debt Ventures Berhad ‘01/22 eased 2 bps to settle at 4.19% with RM20m changed hands. In the AA segment, AmIslamic Bank Berhad ‘01/17 eased 10 bps to close at 4.08% with RM10m changed hands. Elsewhere, CIMB Bank Berhad ‘08/21 eased 7 bps to settle at 4.76% with a total trading volume of RM30m. MGS Benchmark Issues MGS Closing Level (%) Chg (bp) Vol (RM m) 3-yr 3.180 -4.5 23 5-yr 3.630 +3 60 7-yr 3.960 -2 370 10-yr 4.015 -1.5 280 15-yr 4.170 -0.5 0 20-yr 4.270 - - 30-yr 4.700 - - IRS Closing Rates IRS Closing Yld (%) Chg (bp) 1-yr 3.635 0 3-yr 3.730 -1.5 5-yr 3.935 0.5 7-yr 4.120 -0.5 10-yr 4.360 -1.0 Source: Bloomberg, AmBank

               

  

Local News:

• The international reserves of Bank Negara Malaysia amounted to USD$105.3 billion as at 15 June 2015. The reserves position is sufficient to finance 8.1 months of retained imports and is 1.1 times the short-term external debt.