Fixed Income Daily Pulse, 07 July 2015

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

· It was a generally quiet day with a light trading volume on the benchmarks. During the morning session, there was a buy flow on the 20-year MGS which was resisted by some sellers while the afternoon session there is some selling on the 7-year and 10-year MGS. Yields ended up rising by 3-5 bps on the belly of the curve while the back end remained within a tight range. During the day, there are some offshore players unwinding their carry trades by dumping the short end bonds as they hold the implied yield on MYR rose higher. In the GG/AAA segment, Pelabuhan Tanjung Pelepas Sdn Bhd ‘09/20 increased 5 bps to close at 4.13% with a total trading volume of RM10m. Meanwhile Boustead Holdings Berhad ‘11/15 eased 1 bp to settle at 3.80% with a total trading volume of RM22m. In the AA segment, OCBC Bank (Malaysia) Berhad ‘11/15 eased 4 bps lower to 4.09% with RM8m changed hands. Whereas Malakoff Power Berhad ‘12/15 eased 2 bps with a total trading volume of RM15m. MGS Benchmark Issues MGS Closing Level (%) Chg (bp) Vol (RM m) 3-yr 3.200 -4.5 222 5-yr 3.640 +1.0 0 7-yr 3.940 +5.0 155 10-yr 4.070 +5.5 186 15-yr 4.210 +3.0 25 20-yr 4.305 -0.5 140 30-yr 4.740 +1.5 11 IRS Closing Rates IRS Closing Yld (%) Chg (bp) 1-yr 3.695 2.0 3-yr 3.750 2.0 5-yr 4.000 2.7 7-yr 4.165 1.5 10-yr 4.395 0.0 Source: Bloomberg, AmBank

               

  

Local News:

·        The international reserves of Bank Negara Malaysia amounted to USD$105.5 billion as at 30 June 2015. The reserves position is sufficient to finance 8.2 months of retained imports and is 1.1 times the short-term external debt.