Fixed Income Daily Pulse, 08 July 2015

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

· Local govvies endured selling pressure again during the morning session as yields on the 7-year and 10-year MGS rose nearly 5 bps and 2.5 bps respectively on a relatively light volume as most local players are liquidating their positions. On the other side, buyers were mainly foreign names as they are looking to buy on dips taking on a view that the current sell-off is overdone. In the afternoon session, there is some good buying interest in the 10-year MGS which looked like an offshore order causing the yields to close 1 bp lower from yesterday’s close paring this morning session’s losses. It is likely to see yields traded on a range bound in the rest of the week as market sentiment remains weak with market players looking to sell into strength while bargain hunters look to collect if yields rise further. In the GG/AAA segment, UMW Holdings Berhad ‘10/15 eased 18 bps to close at 3.50% with a total trading volume of RM5m. Meanwhile Manjung Island Energy Berhad ‘11/20 eased 1 bp to settle at 4.16% with a total trading volume of RM1m. In the AA segment, First Resource Limited ‘07/17 eased 2 bps lower to 4.18% with RM2m changed hands. Whereas Bumitama Agri Ltd ‘09/19 eased 2 bps with a total trading volume of RM40m. MGS Benchmark Issues MGS Closing Level (%) Chg (bp) Vol (RM m) 3-yr 3.230 +3.0 253 5-yr 3.650 +1.0 22 7-yr 3.950 +1.0 193 10-yr 4.060 -1.0 477 15-yr 4.230 +2.0 12 20-yr 4.330 +2.5 60 30-yr 4.760 +2.0 1 IRS Closing Rates IRS Closing Yld (%) Chg (bp) 1-yr 3.705 1.0 3-yr 3.770 2.0 5-yr 4.005 0.5 7-yr 4.155 -1.0 10-yr 4.395 0.0 Source: Bloomberg, AmBank

               

  

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