CIMB Fixed Income Updates 21 Jan 2016 - CIMB Bond Index Dec 2015

CIMB Bond Index – Dec 2015

• We have completed calculations for the CIMB Bond Index for the month of Dec 2015 and with it final reading for the year 2015.
• The composite index reading for Dec 2015 was 228.05 compared with 227.25 in Nov and 217.09 reading in Dec 2014. This means there was a CAGR of 5.05% in the whole of 2015, higher than 2014 increase of 4.75%: Gains were pronounced in 1H2015, when we noted government bond yields plunged.
• Investors managed to show positive returns by holding Ringgit bonds in 2015. Data from the CIMB Bond Index suggest investors shortened their duration holding in 2015 vis-à-vis 2014. This strategy managed to counter losses in 2H2015, especially in Aug 2015 when yields surged in excess of 40bps.
• Investors managed to maximize returns from investing in Ringgit bonds in 2015 not just by shortening duration but also by looking for opportunities for yield pickup in higher yielding corporate bonds, especially AA rated corporate bonds which offered attractive spreads.