Strong demand. Today’s 7y MGS 9/24 auction garnered a solid bid/cover of 2.877x on an expected size of MYR4b (MYR3b auction + MYR1b private placement). The 7y point had cheapened before the auction amid mild sellin

Results: MGS 9/24 Reopening

·         Strong demand. Today’s 7y MGS 9/24 auction garnered a solid bid/cover of 2.877x on an expected size of MYR4b (MYR3b auction + MYR1b private placement). The 7y point had cheapened before the auction amid mild selling pressure on government bonds and thin trading liquidity last week rising from 3.87% to 3.97% early this week. Yields have since retraced back down and the strong auction results reflect improvement in MYR bond sentiment.

·         Successful auction bids yielded an average of 3.919% with the cut off at a high of 3.924%, within the tight pre-auction WI range of 3.92/93%. The lowest successful yield bid was 3.913%. Post auction, the bond traded around the 3.91/92% level.

·         Up next on the auction calendar is the reopening of 30y GII 5/47 in a size of MYR2b, we estimate.

Bid to cover:            2.877

Highest yield:           3.924%

Average yield:         3.919%

Lowest yield:           3.913%

Cut off:                   63%