Auction Results: GII 7/27 Reopening
· Good demand. Today’s 10y GII 7/27 reopening auction drew good interest registering a bid/cover of 1.832x on an expected MYR3b size. Sentiment was understandably cautious as this auction came on the heels of BNM’s hawkish shift last Thursday when the monetary policy statement stated that the MPC may consider reviewing the current degree of monetary accommodation, a strong sign for rate increase in 2018 although the actual timing of hike in our view remains uncertain.
· Cautious bid with bottom fisher. Bids were cautious. WI had already cheapened from 4.29/26 when the auction was announced last Friday to about 4.34/33 before the closing this morning. Still, successful bids averaged 4.347% which is north of the pre-auction WI and the highest yield cut with a small tail at 4.37%. While upcoming auctions with an estimated MYR11b total supply in four auctions may continue to weigh on the curve, we expect to see increasing bottom fishing interest.
· Next up is the reopening of 15y MGS 4/33. We estimate a size of MYR2.5b.
Bid to cover: 1.832
Highest yield: 4.370%
Average yield: 4.347%
Lowest yield: 4.300%
Cut off: 95%
Regards,
This message is intended only for the use of the person to whom it is expressly addressed and for the purpose of the subject of this email and may contain information that is confidential and legally privileged. If you are not the intended recipient, you are hereby notified that any use, reliance on, reference to, review, disclosure or copying of the message and the information it contains for any purpose is prohibited. If you have received this message in error, please notify the sender by reply e-mail of the misdelivery and delete all its contents.
Opinions, conclusions and other information in this message that do not relate to the official business of Malayan Banking Berhad shall be understood as neither given nor endorsed by it.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.