Fixed Income Daily Pulse, 23 June 2015

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

· The morning session today was pretty quiet where yields were largely unchanged. However, the market took a turn in the afternoon when there was a news reported stating Malaysia’s rating by Fitch remained unchanged at A-, whereas the whole market was expecting a downgrade. However the news appeared to be a misinterpreted report based on last year’s rating causing a knee jerk rally in the market where yields went down between 2-5 bps on the benchmarks and came back up quickly. Overall, yields remain unchanged on the MGS curve apart from the 3-year in which it eased by 1 bp. This indicates that the local market has already priced in a Fitch downgrade, limiting the downside risk towards the actual announcement which is due within the next 2 weeks. In the GG/AAA segment, 2027-2036 tranches PLUS increased at a range of 1-3 bps higher between 4.55%-4.96% with a total trading volume of RM69m. Rantau Abang Capital ‘08/19 increased by 6 bps higher to close at 4.10% with RM10m changed hands. Whereas in the AA segment, Malakoff Power Berhad ‘12/15 eased 1 bp to settle at 3.99% with RM5m changed hands. Jimah Energy Ventures Sdn Berhad ‘05/17 increased 5 bps to close at 4.29% with a total trading volume of RM10m. MGS Benchmark Issues MGS Closing Level (%) Chg (bp) Vol (RM m) 3-yr 3.170 -1 136 5-yr 3.630 0 1 7-yr 3.960 0 338 10-yr 4.015 0 135 15-yr 4.170 0 6 20-yr 4.270 0 - 30-yr 4.700 0 - IRS Closing Rates IRS Closing Yld (%) Chg (bp) 1-yr 3.635 0 3-yr 3.730 0 5-yr 3.945 1.0 7-yr 4.125 0.5 10-yr 4.383 2.3 Source: Bloomberg, AmBank

               

  

Local News:

·        None