Moderate demand. The 20y GII 8/37 auction today garnered modest demand drawing a bid/cover of 1.78x on a smaller than expected

Results: GII 8/37 New Issue

·         Moderate demand. The 20y GII 8/37 auction today garnered modest demand drawing a bid/cover of 1.78x on a smaller than expected MYR2.5b auction size. At this part of the GII curve, participation is mostly from local Islamic accounts especially the pension funds and lifers.

·         While the cover ratio remains healthy, on average it has slowed from 1H2017. For comparison, last year, the average bid/cover of all 15y and 20y MGS/GII auctions was 2.49x and the lowest was 1.92x.

·         Successful yield bids averaged 4.755%, within the pre-auction WI of 4.77/72%, and the highest and lowest bids cut at 4.783% and 4.723% respectively.

·         Next up on the schedule is the new issue of 3.5y MGS 2/21 which we estimate to be in a size of MYR4b in total.

Bid to cover:            1.784

Highest yield:           4.783%

Average yield:         4.755%

Lowest yield:           4.723%

Cut off:                   50%