Malaysia’s government bond market held steady last week, with yields near year-to-date highs despite fiscal concerns driven by rising global prices.

The price of RON95 petrol was maintained, but diesel (Peninsular Malaysia only) and RON97 saw sharp increases of 20.4% and 18.2% respectively, adding pressure to the fiscal outlook.

Bond market

In the primary market, the MYR5.0 billion MGS 03/29 new issue attracted MYR11.1 billion in bids, achieving a bid-to-cover ratio of 2.218x. However, the average yield of 3.237% was higher than the 3.19% when-issued level, reflecting cautious investor sentiment. The upcoming auction of the 7-year GII 03/33 is expected to see firm demand if the when-issued yield exceeds 3.40%. Indicative yields for the 7Y GII are up about 7 basis points year-to-date.

Corporate bond sentiment weakened, with PDS yields edging higher and average daily trading volume (excluding CPs) falling to MYR550 million from MYR660 million the previous week.

Business News

Staff Writer

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