CIMB Daily Fixed Income Commentary - 19 March 2014

Good Morning,

Market Roundup

• US Treasury yields inched down along the curve, as players continued buying into the safe haven bonds amid Ukraine’s geopolitical issue. A Ukrainian officer was reportedly killed in Crimea military base by armed men on Tuesday. We view that further escalation of political tension may drive the yields a tad lower in short term.
• Malaysian government bonds strengthened, led by strong buying interest in GII Mar’21, MGS Jul’24 and Mar’17. Total trading volume spiked to RM4.2 billion from RM1.7 billion on prior day, as market sentiment was boosted by the 10-year GII reopening.
• THB denominated government bonds inched down, partially due to profit taking activities after gains garnered a day ago. Meantime, both domestic and foreign funds showed net buying of THB11.4 billion amid improved market sentiment due to easing in political tension.
• IDR denominated government bond yields ended lower on Tuesday amid debt securities auction held by the government. At the auction, the government awarded funds totaling IDR10 trillion as its indicative target. Meanwhile, total incoming bids reached IDR28.38 trillion. Most of funds flew to longer dated papers. Although demand in the auction was relatively lower than previous conventional bonds auction, but activities in the secondary market rose substantially. Trading volume jumped to IDR17.62 trillion from IDR11.50 trillion in the prior day, whilst most of activities concentrated on the benchmark series.
• Asian dollar credits weakened, after Chinese property company Zhejiang Xingrun was reported that defaulted on loans amounting to CNY3.5 billion, putting pressure onto the Chinese property sector credits. B+ rated Evergrande Oct’18 was traded lower to 96.63pts, from 97.47pts a day before, whilst newer issue Agile Feb’17 fell to 97.75pts from Monday’s level 98.00pts.

Best Regards,
CIMB Fixed Income Research
Corporate Banking, Treasury and Markets
Tel: +603 2261 8888 | Fax: +603 2261 8705
www.cimb.com

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