Published on 15 Apr 2021.
The primary corporate bond market was exceptionally active in March, with overall issuance swelling to RM23.8 bil (February: RM5.4 bil). This was the biggest monthly issuance since May 2019. The count of issuers also hit a record high, with 39 entities tapping corporate bonds in March, from 9 and 22 entities in the prior 2 months. The robust activity can be partly attributed to front-loading of firms’ financing needs to lock in lower interest rates, given substantial upward pressure on bond yields in the last two months. The benchmark 10-year Malaysian Government Securities (MGS) yield surged 39.5 and 17.4 bps m-o-m as at end-February and end-March respectively amid global bond market sell-off in response to rising inflation expectations and brighter economic prospects.
Meanwhile in the same month, MGS and Government Investment Issues (GII) were a robust RM16.5 bil (February: RM12.0 bil). Concurrently, short-term government papers namely Malaysian Treasury Bills (MTB) and Malaysian Islamic Treasury Bills (MITB) also accelerated to RM6.0 bil, from RM3.5 bil in February.
Foreign demand remained resilient, with a net foreign inflow of RM5.9 bil (February: RM7.2 bil) - the eleventh successive month of net foreign purchases. The sustained inflows lifted the proportion of foreign-held Malaysian bonds to 14.5% as at end-March, the highest level since April 2018.
Woon Khai Jhek, CFA
(603) 3385 2512
(603) 3385 2577
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