Results: MGS 11/27 New Issue
· Bullish tone. Today’s 10.5y MGS 11/27 auction drew a robust bid/cover of 3.340x, the second highest YTD, on an expected size of MYR4.0b (MYR3.0b auction + MYR1.0b private placement). In addition to its new benchmark status (replacing MGS 11/26) underpinning demand, the strength in MYR and BNM’s stay of accommodative monetary stance reinforced a bullish-bias sentiment in the domestic bond market.
· There was no concession as successful yields averaged 3.899%, at the lower end of the pre-auction WI of 3.95/89% and was tighter than the outgoing MGS 11/26 benchmark which was done at 3.94%. The high and low yields printed at 3.91% and 3.88% respectively. Post auction, yield on the new bond was taken to a low of 3.84/83% area probably due to buying from bids that missed in the auction and some short covering.
· Next auction is the reopening of 7y GII 8/24 slated before month-end. We estimate the size to be MYR3.5b.
Bid to cover: 3.340
Highest yield: 3.910%
Average yield: 3.899%
Lowest yield: 3.880%
Cut off: 95%