Fixed Income Daily Pulse, 05 Aug 2015

The day’s trade recap (from our trading desk):

·  Yields rose today on light volume as the MYR continue to weaken against the USD with market sentiment remaining jittery, resulting in some offshore players preferring to off-load risk and reduce their MYR assets until there is more certainty. However 5Y MALAY CDS did eased c.3 bps to 150 bps today. 5-year bond-swap spreads tightened as IRS rates rose at a slower pace than the 5-year MGS yields. Overall, another directionless day for local govvies. Putrajaya Holdings Sdn Bhd ‘01/16 eased 5 bps at 3.66% with a total trading volume of RM60 million. Meanwhile, Bank Pembangunan Malaysia Berhad ‘04/21 remained unchanged to close at 4.23% with a total trading volume of RM50 million. In the AA segment, Benih Restu Berhad ‘06/25 increased 3 bps to settle at 4.63% with RM15 million done. Meanwhile, Malaysia Airport Holdings Berhad ‘12/24 eased 1 bp at 5.02% with a total RM70 million traded. MGS Benchmark Issues MGS Closing Level (%) Chg (bp) Vol (RM m) 3-yr 3.265 +2.5 0 5-yr 3.685 +5.5 171 7-yr 3.970 +2.0 115 10-yr 4.070 +1.5 20 15-yr 4.290 +1.0 24 20-yr 4.360 +2.0 0 30-yr 4.700 0 1 IRS Closing Rates IRS Closing Yld (%) Chg (bp) 1-yr 3.758 1.2 3-yr 3.820 1.5 5-yr 4.028 2.3 7-yr 4.200 1.5 10-yr 4.400 1.0 Source: Bloomberg, AmBank                      Source: BondStream, AmBank

               

  

Local News:

·             Export surged 5.0% y/y in June. Shipments of electrical and electronics products grew 13.5% y/y in June and exports of palm oil and palm-based products increased by 14.7% y/y. Meanwhile, imports fell 1.5% y/y in June. The drop in imports was attributed to capital goods and intermediate goods. The visible trade surplus of the country came in at RM7.98 billion in June.