MONTHLY BOND MARKET AND RATING SNAPSHOT - MAY 2023 - FULL REPORT |
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| Report ID | 60538900469461 | Popularity | 817 views 47 downloads | |||||
| Report Date | Jun 2023 | Product | ||||||
| Company / Issuer | Fixed Income Bond Market Update | Sector | Bond Market Update - Bond Market Update | |||||
| Price (RM) |
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| Rationale |
Summary Global Bond Markets Global government bonds traded mixed in May. The UST market came under selling pressure in May as investors monitored the progress of the US debt negotiations and assessed the Fed’s interest rate policy going forward. In Europe, the bund ended mostly firmer in May, with yields mostly declining on softer European inflation data for May. Malaysian Government Bond Market Local govvies ended May on a mixed note. MGS yields along the 7y to 10y part of the curve were lower on firm demand as markets continue to expect moderating growth after the strong 5.6% GDP growth in 1Q2023. Meanwhile, yields on the front end and long-term MGS rose in tandem with higher UST yields. BNM’s surprise move to raise the OPR by 25bps to 3.00% in its May 3 meeting was also a key driver of higher short-end yields. Malaysian Corporate Bond Market In May, corporate bond gross issuance remained steady at RM7.9 billion compared to the prior month. The increase in rated corporate bond issuance (Cagamas included) was offset by a similar decline in the unrated corporate and quasi-government segments. On the secondary market, local corporate bonds ended firmer in May with yields across the AAA and AA segments easing by between six bps and nine bps. Foreign Holdings of Local Bonds The local bond market registered its fifth consecutive month of positive net foreign flows (RM3.0 billion) in May, reflecting the attractiveness of local bonds amid moderating inflation. This was led by RM3.8 billion of net foreign inflows into MGS. Consequently, foreign holdings of local bonds inched up to 13.6% in May. |
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