Dear all,
Auction Results: GII 11/23 New Issue
· Moderate bid. Today’s 5.5y GII 11/23 new issue, which will replace GII 4/22 as the new 5y GII benchmark, garnered a bid/cover of 1.989x on an expected MYR4b size. While seemingly not as great as the 2.6x bid/cover in previous 5y GII 4/22 auction, demand for this issue is still considered decent on the back of local accounts’ support.
· Market sentiment remained cautious as USDMYR edged higher and on concerns over government debt given the headline news on MYR1 trillion debt level. To illustrate, on top of MYR687b direct liabilities the MYR1 trillion figure includes MYR199b contingent liabilities (include 1MDB’s MYR38b) and MYR201b committed future lease payments for public-private partnership projects such as schools and hospitals.
· Auction results had a cautious tone as highest successful yield cut off at 4.110%, slightly tailing the pre-auction WI range of 4.10/3.99%, and average yield came in at the top end of the range at 4.094%. Successful yields started from a low of 4.070%.
· Up next is a new issue of 20y MGS 6/38 which will be the new 20y MGS benchmark. We estimate a MYR3b auction size.
Bid to cover: 1.989x
Highest yield: 4.110%
Average yield: 4.094%
Lowest yield: 4.070%
Cut off: 43%
Regards,
Winson Phoon, ACA
(65) 6231 5831
Se Tho Mun Yi
(603) 2074 7606
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