CIMB MYR Weekly Fixed Income Commentary for 25 Apr 2014

Attached is the weekly market highlights for Apr 25, 2014:

Market Roundup

• Malaysian government bonds marginally weakened amid thin trading activities, due to the lack of major market drivers. However, we noted better buying interest along the shorter dated government bonds, particularly papers with maturity of less than 3-years.
• Ringgit corporate bonds were pretty actively traded midweek. Investors were seen with improved bidding interest on the longer tenure credits amid steady sovereign yields. However, we noted that market focus was still slanted towards the short to medium term bonds. Apart from that, some investors were playing defensively as we noted better bids along higher rated short term bonds, whilst the lower rated papers were slightly pressured, including Kesas Oct’14 and AMMB Holdings Aug’14.
• Ringgit ABS market was seen thinly traded throughout the week. There were only two short dated Cagamas papers dealt, namely Cagamas MBS Oct’14 and May’14, with a total traded value of RM9 million.
• Starting from the major sell off ahead of the Good Friday long weekend, the US Treasury yield curve flattened throughout last week. Shorter ends remained under pressure partially due to the auctions of 2-, 5- and 7-year notes. However longer end 10T and 30T were seen recovering losses amid mixed economic releases.
• Asian dollar market was quiet early the week, before eventually became actively traded, led by the heavy supply of bond issuances in primary market. Ahead of weekend, Woori Bank Apr’24 widened by 10bps to 218bps from the offering yield. Aside, secondary credits of Sinopec were pressured by the newly issued CNOOC tranches, which were seen with mixed market reaction upon issuance date. We view that the dollar credits to be pressured in the short term, due to the anticipation of incoming supply in primary market.

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

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