Macro Highlights

Malaysia 3Q2023 GDP growth improved to 3.3% y/y, beating median forecast of 3.2% (forecast range: 1.7% - 3.5%) provided by 14 economists surveyed by Bloomberg. In the final scheduled MPC meeting for 2023, BNM kept the benchmark OPR unchanged at 3.00% as expected.

Global Bond Market

Global bonds rallied extensively in the month of November 2023, rebounding firmer after extensive weakening recorded in the period June to October.

Malaysia Bond Market

Ringgit government bonds rallied with yields down 15-20 bps m/m, while swap rates fell by a larger margin where 3Y up to 10Y IRS rates fell 20-30 bps m/m. Ringgit private debt securities (PDS) yields fell alongside the decline in MGS yields.

Global FX Market

Throughout November 2023, dollar demand was subdued, and risk-on mode improved. The DXY index fell while other major currencies appreciated.

Local Issuances, Foreign Holdings & Secondary Market Volume

ESG Issuance - Total ESG corporate bonds issued in January-November 2023 comes up to MYR20.6 billion from revised MYR19.1 billion the month before.

MGS/GII Issuance – The month of November saw gross GII issuance at MYR15.0 billion. No MGS was issued during the month.

Foreign Holdings – October 2023 data showed that the total foreign holdings in MGS fell by 0.8% m/m to while foreign holdings in GII papers fell 0.4% m/m.

Secondary Volume – The improved sentiment in the domestic bond market was aided by higher trading volume.

MYR Bonds: Rates & Credit Perspectives

Interest is likely to fall as we head towards the year-end and the holiday break. Meanwhile, we noted that profit taking activity has taken some hold in the PDS space in the past couple of weeks.

Source: AmInvest Research - 6 Dec 2023