Fixed Income Daily Pulse, 01 July 2015

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

· Against majority expectations, Fitch has reaffirmed Malaysia’s sovereign rating at A- and upgraded the outlook from negative to stable. Following this surprise, the local market continued to rally today when the market gapped down by 6 bps once opened in the morning with offers on the benchmarks taken up very quickly. The 7-year MGS gapped the most as it eased 13 bps from yesterday’s closing within the first hours of trading, being the cheapest off the MGS curve. The 10-year MGS was most actively traded today with a volume done RM1.25b while the 5-year GII & both 7-year benchmarks saw a decent volume done as well. In the GG/AAA segment, 2019-2022 tranches of Aquasar Capital Sdn Bhd bonds eased 1 bp at 4.22% to 4.49% with a total trading volume of RM190m. Meanwhile Aman Sukuk Berhad ‘03/16 increased 10 bps to close at 3.69% with RM10m changed hands. In the AA segment, Media Chinese International Limited ‘02/19 eased 1 bp to settle at 4.29% with RM2m changed hands. Whereas Malaysia Airport Holdings Berhad ‘12/24 increased 4 bps to close at 5.08% with a total trading volume of RM92m. MGS Benchmark Issues MGS Closing Level (%) Chg (bp) Vol (RM m) 3-yr 3.190 -1.0 100 5-yr 3.570 -4.0 140 7-yr 3.820 -13 864 10-yr 3.940 -7.5 1231 15-yr 4.120 -6.0 134 20-yr 4.270 0 210 30-yr 4.680 -4.0 21 IRS Closing Rates IRS Closing Yld (%) Chg (bp) 1-yr 3.635 -1.0 3-yr 3.710 -2.5 5-yr 3.915 -2.5 7-yr 4.095 -5.5 10-yr 4.315 -7.5 Source: Bloomberg, AmBank

               

  

Local News:

·        Malaysia’s Whole Economy PMI decreased to 47.6% from 49.5%.