· Strong bids. Reversing lethargic bid in the last auction, today’s 15y GII 9/30 reopening

Results: GII 9/30 Reopening

·         Strong bids. Reversing lethargic bid in the last auction, today’s 15y GII 9/30 reopening drew a bid/cover of 2.493x despite a larger-than-expected size of MYR3b. This 15y GII we think is the part of the curve offering relative value, hence drawing good demand from domestic real-money accounts. The auction was also aided by a recovery in sentiment in the past two days.

·         Offer relative value. Successful yields averaged 4.160%, within the pre-auction WI of around 4.16/14. The highest yield was 4.169% and the lowest yield was 4.133%. This offers approximately 24bps over the benchmark 15y MGS 6/31 and 9 months shorter in tenor. Adjusting for tenor differential, the pickup is an attractive ~30bps.

·         Next auction is the reopening of 10y MGS 11/26. We estimate a size of MYR3b.

Bid to cover:            2.493

Highest yield:           4.169%

Average yield:         4.160%

Lowest yield:           4.133%

Cut off:                   75%