Background Summary

A slightly less heavy issuance target for the coming year. As we conveyed aside our Malaysia’s 2024 Budget report in October, based on the lowering of Malaysia’s fiscal deficit to 4.3% of GDP from 5.0% in 2023, it is going to be slightly less heavy issuance of MGS and GII in 2024 compared with 2023. We are penciling in a gross issuance total in range of MYR170-180 billion for 2024, compared with MYR185 billion in 2023.

The release of the MGS and GII auction schedule (or auction ‘calendar’) this week, for the year 2024, offers us a chance to not only pencil in the possible amounts to be issued at every incoming auction, but also offers us to present our view on the pattern of issuances for the year.

The number of auctions in 2024 will be 37 vs. a similar 37 in 2023. This will translate into an auction average range MYR4.6 billion - MYR4.9 billion and would be a minor reduction from the MYR5.0 billion average in 2023. Thus, per auction demand should remain firm, versus the average BTC in 2023 of 2.16 times.

Out of the gross issuance of MYR180 billion (top of forecast range) expected in 2024, we expect a slant towards GII (similar to 2023). By tenor, we could also see semblance of the auctions done in 2023 - we expect issuance distribution to remain highest for 5Y to 10Y tenors. Lastly, we expect PPs to remain an option for auctions in the coming year, especially as total offerings will remain relatively elevated compared to pre-pandemic period (

Source: AmInvest Research - 28 Dec 2023