· Decent bid. Today’s 7y GII 7/23 reopening tender garnered a modest bid/cover of

Results: GII 7/23 Reopening

·         Decent bid. Today’s 7y GII 7/23 reopening tender garnered a modest bid/cover of 2.205x on a slightly larger than expected MYR3b size. On top of local demand, the upward adjustment in yields likely attracted bidding interests. WI started around 4.00/3.97% in the morning but widened heading into the tender ranging 4.07/04% pre-auction. Auction results tailed as successful yields averaged 4.094%, with the cut-off at 4.143% and a low of 4.047%.

·         On the economic front, 3Q16 real GDP growth picked up to 4.3% YoY (2Q16: +4.0% YoY) on the back of consumer spending and net external demand. Our economic research team maintains full-year 2016 GDP growth at 4.1% and 4.5% for 2017, but cautions on increased volatility given uncertainties in world markets. Domestic market will closely watch the last MPC meeting for the year on 23 Nov.

·         Gross MGS/GII issuance totals MYR82.5b YTD. Next up on the calendar is a re-tap of 10y MGS 11/26 which we estimate to be a size of MYR2b.

Bid to cover:            2.205x

Highest yield:           4.143%

Average yield:         4.094%

Lowest yield:           4.047%

Cut off:                   25%