26 February 2018
Credit Markets Weekly
Focus on Re-Opening 10y MGS; USTs Mixed Post-FOMC Minutes.
SUMMARY:
¨ MYR Credit Market: As global yields continue to weaken, MGS and MYR weakens; Govvie weekly trade volume rise to MYR9.0bn above the weak MYR7.4bn recorded the week before, but remaining below the 3-month average of MYR11.2bn; Corporate/bond sukuk secondary trades rose to MYR2.03bn from MYR1.43bn the week before; The primary market saw activity once more as a total issuance of MYR6.2bn was recorded in the week.
¨ Corporate News - RAM Ratings reaffirmed Mudajaya Corporation Berhad at A2/Neg.
¨ APAC USD Credit Market: US Treasuries mixed after FOMC minutes and monetary policy report. On shorter trading week, the USTs yields reached multi-year highs following the release of Jan policy meeting minutes amid heightening expectation of more aggressive Fed rate hikes supported by the strong economic data the week before. A busy week ahead for Fed Chair Jerome Powell as he delivers his first semi-annual Humphrey Hawkins testimony to Congress.
¨ Rating Actions - Moody’s has revised the outlook on Woodside Petroleum Ltd. (Woodside) upward from Baa1/Neg to Baa1/Sta; Fitch has revised the outlook on PT Perusahaan Gas Negara Tbk (PGN) from BBB-/Pos to BBB-/Sta; Fitch revised the outlook on PT Saka Energi Indonesia (Saka) downward from BB+/Pos to BB+/Sta; Moody’s has placed a review for downgrade on Baa3 rated Punjab National Bank (PNB); Moody’s has assigned Toba Bara Sejahtra Tbk with a B3/Sta rating.
Table 1: Index Weekly Movements
Indices | 23-Feb | 16-Feb | Weekly Chg (bps) |
iTraxx AxJ 5y IG | 70.3 | 69.3 | 1 |
SOR 2y (%) | 1.78 | 1.68 | 10 |
SOR 5y (%) | 2.22 | 2.15 | 7 |
Malaysia 5y CDS | 63.3 | 61.9 | 1 |
MGS 3y (%) | 3.38 | 3.41 | -3 |
MGS 5y (%) | 3.60 | 3.58 | 2 |
MGS 7y (%) | 4.00 | 3.96 | 4 |
MGS 10y (%) | 4.08 | 3.97 | 11 |
AAA 5y Spread* (bps) | 76 | 77 | -1 |
AAA 10y Spread* (bps) | 67 | 72 | -5 |
AA 5y Spread* (bps) | 107 | 107 | 0 |
AA 10y Spread* (bps) | 100 | 106 | -5 |
Source: Bloomberg, BNM, RHBFIC *MYR-denominated bonds
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