FW: RHB FIC Credit Markets Weekly - 8/1/18

 

 

 

8 January 2018

Credit Markets Weekly

MYR Rallied Below 4.00/USD; Edra Energy Issued MYR5.085bn

SUMMARY:

¨      MYR Credit Market: The 20y MGS 04/37 reopening drew BTC of 1.91x. The reopening of the 20y MGS 04/37 recorded an average yield of 4.607% from 4.58% recorded the day before. The MYR2bn tender saw a BTC of 1.91x compared to 1.61x in the last auction in Jun 17; As the USD continued to weaken over the week, EM Asia saw a strong performance of local currencies. Topping the performance was the MYR, which strengthened +1.23% WoW to 3.9975/USD; Govvies trade volume saw a surge to MYR13.04bn, ahead of the 3-month weekly average of MYR10.3bn Secondary flows recorded in the corporate bonds space spike to just under MYR3.26bn on the back of strong primary issuances.

¨      Corporate News –  RAM Rating raised the outlook on Bumitama Agri Ltd to AA3/Pos from AA3/Sta; RAM reaffirmed the ratings of BGSM Management Sdn Bhd at AA3/Sta; RAM Rating reaffirmed BNP Paribas Malaysia Berhad at AA2/Sta; RAM Rating also reaffirmed Maybank Investment Bank Berhad (Maybank IB) at AAA/Sta; RAM Rating also reaffirmed Affin Hwang Investment Bank Berhad at AAA/Sta; MARC Ratings affirmed its AA-IS/Sta ratings on Konsortium Lebuhraya Utara-Timur (KL) Sdn Bhd's (Kesturi); RAM Rating affirmed the rating of Teknologi Tenaga Perlis Consortium Sdn Bhd (TTPC) at AA1/Sta; RAM Ratings affirmed the rating of Cahya Mata Sarawak Berhad (CMS) at AA3/Sta; RAM Rating also maintained the rating on Jati Cakerawala Sdn Bhd at AAA3/Neg.

¨      APAC USD Credit Market:  US Treasuries fell on modest jobs report; FOMC minutes revealed mixed view on pace of rate hikes; ECB officials are proposed to end the current QE programme once it ends on Sep-18.

¨      Rating Actions - Moody's has upgraded West China Cement Ltd's (WCC) ratings to Ba3/Sta from B1/Sta; Moody's has placed a review for upgrade on the B3/Sta rated Yingde Gases Group Co. Ltd; Moody's has downgraded Global Logistic Properties Ltd (GLP) from Baa2/Neg to Baa3/Neg; Fitch Ratings has downgraded Wanda Commercial Properties Co. (Wanda) to BB+ from BBB; remained on a negative watch; Fitch Ratings has also downgraded LVGEM China Real Estate Investment Co. Ltd. (LVGEM) to B/Sta from B+/RWN.

 

Table 1: Index Weekly Movements

Indices	05-Jan	29-Dec	Weekly Chg (bps)
iTraxx AxJ 5y IG	63.6	67.1	-3
SOR 2y (%)	1.50	1.53	-3
SOR 5y (%)	1.82	1.84	-1
Malaysia 5y CDS	55.4	58.4	-3
MGS 3y (%)	3.34	3.32	2
MGS 5y (%)	3.50	3.53	-3
MGS 7y (%)	3.84	3.88	-4
MGS 10y (%)	3.90	3.91	-1
AAA 5y Spread* (bps)	82	80	2
AAA 10y Spread* (bps)	82	78	4
AA 5y Spread* (bps)	113	111	2
AA 10y Spread* (bps)	116	112	4

Source: Bloomberg, BNM, RHBFIC        *MYR-denominated bonds

 

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