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 entities 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 basis points month-on-month 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 RM16.5bil 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 RM3.5bil in February.
Foreign demand remained resilient, with a net foreign inflow of RM5.9bil versus 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.