MALAYSIA may sell up to RM18bil of government bonds this year to help fund its pump-priming measures, according to Rating Agency Malaysia Bhd (RAM).
Bond traders expected the government to issue between RM15bil and RM18bil of Malaysian Government Securities (MGS) in 2003, RAM said in its February newsletter.
The traders predicted fresh sovereign bond issues after the government said it was planning an economic package to sustain economic growth, as global demand slowed and worries grew over a possible US-led military strike against Iraq.
Last year Malaysia issued about RM15bil in MGS, of which RM9bil was tendered out while the balance was placed privately, RAM said.
On Thursday, traders said that Malaysia would issue between RM5bil and RM8bil worth of five-year domestic bonds this month, as up to RM10.3bil of MGS would expire by the end of March.
So far this year, the central bank has placed RM7bil 10- and 15-year MGS to private investors in three tranches.
Speculation over the impending issues pushed the five-year benchmark MGS yield two basis points up to 3.09% in late Thursday trade.
Five issues of RAM-rated corporate debt securities worth RM800mil were offered to investors in the primary market in January. RAM said in the February issue of its RAM Bond Newsletter that the issuers were from the industrial products and property and real estate sectors.
In terms of the general market, the inaugural Islamic bond issue of Sime Darby Bhd RMl.5bil Al-Murabahah commercial papers/medium-term notes was of particular note.
Meanwhile, RM140mil of RAM-rated debt securities matured in January.
For the entire market, total outstanding corporate debt securities fell to an estimated RMl00.13bil that month compared with RM114.20bil the previous month.
Total outstanding MGS inched up to RMlll.55bil, while outstanding Khazanah and Danaharta bonds remained at RM10bil and RMll.14bil respectively.
Outstanding Cagamas securities slipped 1.7% to RM22.21bil. RAM rated three new proposed issues of debt securities worth RMl.35bil from the diversified holdings and financial services sectors in January.
As in the previous months, long-term securities remained popular as issuers continued to take advantage of the low interest rates.
The corporate bond market experienced rather active trading in January, with RM12.5bil of bonds traded, up a hefty 45% from the previous month's RM8.6bil.
Interest remained centred on issues with ratings of AAA, AA and A.
The AAA papers included those by British American Tobacco (M) Bhd, Intelek Perkasa Bhd, Petronas Gas Bhd, Projek Lebuhraya Utara-Selatan Bhd, Putrajaya Holdings Sdn Bhd, Sime Darby Bhd and Syarikat Prasarana Negara Bhd. The higher-yielding AA and A papers included those from Celcom (M) Bhd, Encorp Systembilt Sdn Bhd, Gamuda Bhd, GB3 Sdn Bhd, Hong Leong Industries Bhd and Kesas Sdn Bhd.
MGS also traded on a bullish note, with RM24.5bil changing hands in January compared with just RM5.6bil in December.
Strong buying interest pushed yields lower across the spectrum. The most actively traded long-term government paper was MGS1/97, which chalked up a turnover of RM12.7bil.
Yields for this paper fell to 3.07%3.14% in January from 3.13%3.17% the previous month. Bernama
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