BOND+SUKUK INFORMATION EXCHANGE BIXMALAYSIA.COM NEWS UPDATE

25 August 2020 US Yield Daily Yield Weekly Yield Monthly Yield YTD Yield Treasury 24 Aug 20 Change 21 Aug 20 Change 17 Aug 20 Change 24 July 20 Change 31 Dec 19 MARKET bps bps bps bps 3 YEAR 0.18 2 0.16 0 0.18 1 0.17 -144 1.62 5 YEAR 0.28 1 0.27 -1 0.29 1 0.27 -141 1.69 7 YEAR 0.47 1 0.46 -2 0.49 3 0.44 -136 1.83 SUMMARY 10 YEAR 0.65 1 0.64 -4 0.69 6 0.59 -127 1.92

MGS Yield Daily Yield Weekly Yield Monthly Yield YTD Yield 24 Aug 20 Change 21 Aug 20 Change 17 Aug 20 Change 24 July 20 Change 31 Dec 19 bps bps bps bps 3 YEAR 1.81 0 1.81 -4 1.85 -16 1.97 -117 2.98 5 YEAR 2.04 -1 2.05 -2 2.06 -8 2.12 -111 3.15 7 YEAR 2.22 -2 2.24 1 2.21 -9 2.31 -108 3.30 10 YEAR 2.51 1 2.50 1 2.50 -9 2.60 -79 3.30

GII Yield Daily Yield Weekly Yield Monthly Yield YTD Yield 24 Aug 20 Change 21 Aug 20 Change 17 Aug 20 Change 24 July 20 Change 31 Dec 19 bps bps bps bps 3 YEAR 1.81 -2 1.83 -10 1.91 -20 2.01 -125 3.06 5 YEAR 2.03 0 2.03 0 2.03 -6 2.09 -116 3.19 7 YEAR 2.32 1 2.31 -1 2.33 -5 2.37 -98 3.30 10 YEAR 2.51 1 2.50 1 2.50 -9 2.60 -91 3.42 • 1 bps = 0.01% AAA Yield Daily Yield Weekly Yield Monthly Yield YTD Yield • Increase in Yield = Decrease 24 Aug 20 Change 21 Aug 20 Change 17 Aug 20 Change 24 July 20 Change 31 Dec 19 in the bond price/value bps bps bps bps 3 YEAR 2.44 -2 2.46 -4 2.48 -11 2.55 -111 3.55 5 YEAR 2.61 -1 2.62 -3 2.64 -8 2.69 -106 3.67 Source: US Treasury, BNM & 7 YEAR 2.75 1 2.74 -1 2.76 -10 2.85 -101 3.76 BIX 10 YEAR 2.98 1 2.97 0 2.98 -15 3.13 -91 3.89 NEWS Sarawak oil palms unit to issue Sukuk Murabahah of up to RM1 billion UPDATE Sarawak Oil Palms Bhd’s (SOPB) wholly-owned unit and special purpose funding vehicle, SOP Capital Sdn Bhd, has proposed to issue unrated Islamic medium term notes (Sukuk Murabahah) of up to RM1 billion in nominal value. Today's headlines of interest and summaries as extracted from the In a filing with Bursa Malaysia yesterday, SOPB said the Sukuk Murabahah Programme’s tenure is up to 20 years from its first issue date. According international and local media. to the Miri-based plantation company, SOP Capital had received the acknowledgement receipt from the Securities Commission of Malaysia on Aug 21, 2020, pursuant to OCBC Al-Amin Bank Bhd’s lodgement (on behalf of SOP Capital) of the Sukuk Murabahah Programme. OCBC Al- Amin Bank Bhd is the principal adviser, lead arranger, lead manager and Shariah adviser for the Sukuk Murabahah Programme, it said.

Proceeds from the issuance of the Sukuk Murabahah would be utilised to part-finance and/or part-reimburse the cost and expenses in relation to plantation development, cultivation, replanting, mechanisation, plant or building expansion, upgrading, equipment replacement and any other activities in relation to the group’s upstream and downstream businesses. THE EDGE MARKETS NEWS Parliament approves raising govt debt ceiling to 60% The parliament of Malaysia on Monday approved the government's plan UPDATE to raise its debt ceiling for the first time in more than a decade, as Southeast Asia's third-largest economy grapples with the economic fallout from the coronavirus pandemic. Parliament voted to allow the government to borrow up to 60% of gross domestic product, as part of Today's headlines of interest and temporary measures to mitigate the effects of the pandemic on the summaries as extracted from the public and local businesses. The last time Malaysia raised its debt ceiling international and local media. was in July 2009 during the global financial crisis, when it increased its maximum borrowings by 10 percentage points to 55% of GDP. The latest raising of the debt ceiling was part of a temporary bill to enable government financing for economic stimulus packages and recovery plans and related matters.

The government under Prime Minister has rolled out stimulus packages totaling around 295 billion ringgit (US$70.7 billion) this year to help the public and businesses weather the pandemic, finance minister said when winding up the debate on the bill in parliament. That includes a fiscal injection of 45 billion ringgit, which raises Malaysia's debt ceiling to 56%, he said. Malaysia's economy plunged 17.1% in the second quarter, its first contraction since 2009, as the pandemic ravaged business activity. Malaysia's central bank expects the economy to contract by between 3.5% and 5.5% this year as a whole. Measures under the bill expire at the end of 2022.

NEWS Firm economic recovery seen in H2 as June leading index rises at faster pace UPDATE Malaysia can expect a firm recovery in the second half of this year as economic activities pick up and provided there is no second wave of the Covid-19 pandemic outbreak, the Statistics Department said.

Today's headlines of interest and In a statement issued yesterday, it said despite a 17.9% contraction in summaries as extracted from the GDP in the second quarter, the leading index (LI) - which provides an international and local media. early signal of the future economic direction - grew at a faster pace in June. Chief statistician Datuk Seri Mohd Uzir Mahidin said the LI rose 4.5% in June 2020 (May 2020: 0.6%) based on year-on-year comparison. “Meanwhile, the LI recorded 3.7% in June 2020 as against the previous month.

“The month-on-month growth of LI was contributed mainly by the number of new companies registered (1.5%) and real imports of other basic precious & other non-ferrous metals (1.3%), ” he said. He said the LI shows a better signal of economic direction as the economic sectors were allowed to resume operations while adhering to the new normal starting June 10 with the implementation of the recovery movement control order (RMCO). Mohd Uzir said the coincident index (CI) which measures the overall current economic performance, recorded 110.0 points in June 2020 from 113.5 points in June 2019, decreased by 3.1% year-on-year. REUTERS

NEWS TREASURIES-Traders ready for note auctions, U.S. Fed guidance

Stable U.S. Treasury yields on Monday showed traders preparing for a UPDATE week that will include of a barrage of new supply and possible insight from the Federal Reserve on how it will support the economy. The benchmark 10-year yield was up less than a basis point at 0.6493% in Today's headlines of interest and afternoon trading. summaries as extracted from the The yield was roughly in the middle of the range where the 10-year note international and local media. has traded since late March and indicated investors were looking ahead to auctions of $148 billion worth of 2-year, 5-year and 7-year notes starting on Tuesday said Ben Jeffery, BMO Capital Markets rates strategist. Remarks from Federal Reserve Chairman Jerome Powell scheduled for Thursday could shed light on the U.S. central bank's next steps to promote an economic recovery.

"People are probably just squaring positions ahead of the more consequential events later this week," Jeffery said. Jack McIntyre, fixed income portfolio manager for Brandywine Global Investment Management, said despite the upcoming auctions, U.S. Treasury yields will likely stay close to current levels until the Fed provides more clarity about its intentions. "My view is that the supply doesn't change the trend in the bond market. I think yields are going to be rangebound," he said. DISCLAIMER

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