Bond issuance in March at 22-month high

KUALA LUMPUR: The primary corporate bond market was exceptionally active with an issuance of RM23.8bil in March, representing the biggest monthly issuance since May 2019.

RAM Ratings said in a statement that the count of issuers in March was at a record with 39 entites tapping corporate bonds, as compared to nine and 22 in the prior two 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," said the credit rating agency.

Meanwhile in the same month, MGS and Government Investment Issues (GII) were a robust RM16.5 bil as compared to RM12bil in February.

Concurrently, short-term government papers namely Malaysian Treasury Bills (MTB) and Malaysian Islamic Treasury Bills (MITB) also accelerated to RM6bil from RM3.5 bil in February.

Foreign demand remained resilient, with a net foreign inflow of RM5.9 bil verus RM7.2bil in February - 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.
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RAM Ratings , bonds , issuance , loans


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