June 6, 2018 Global Markets Research Fixed Income Fixed Income Daily Market Snapshot US Treasuries UST US Treasuries gained with yields slipping 1-3bps across the T enure C lo sing (%) C hg (bps) curve as markets were torn between upbeat US data and 2-yr UST 2.49 -2 renewed selloff in Italian bonds that prompted a 25bps rally 5-yr UST 2.77 -3 10-yr UST 2.93 -1 in the 10Y to 2.79%. The UST curve bull steepened with the 30-yr UST 3.08 0 2s losing 2bps to 2.49% while the 10s shed just a bp to 2.93%. With no new supply in the pipeline this week, we expect US treasuries to be influenced by trade balance and MGS GII* initial jobless claims data as well as trade and geopolitical T enure C lo sing (%) C hg (bps) C lo sing (%) C hg (bps) development before cautiousness ahead of next week’s 3-yr 3.71 0 3.73 9 5-yr 3.84 2 4.02 0 FOMC meeting sets in. 7-yr 4.03 0 4.17 1 10-yr 4.18 0 4.33 0 MGS/GII 15-yr 4.62 0 4.77 4 rd Trading volume in local govvies pulled back further for a 3 20-yr 4.90 0 4.93 9 consecutive day, to RM875m as much softer trading 30-yr 4.93 1 5.01 1 momentum in MGS overwhelmed a pick-up in trading * M arket indicative levels interests in GII. Yields were seen largely unchanged in the MGS space with the benchmark 7Y and 10Y flat at 4.03% and M YR IRS Levels 4.18% respectively. Meanwhile, GII yields were generally IR S C lo sing (%) C hg (bps) higher by 1-9bps with the 3Y and 20Y edging up the most, by 1-yr 3.75 0 9bps each to 3.73% and 4.93% respectively. Trading activities 3-yr 3.81 0 were skewed to the 4-5Y tenors i.e. MGS 03/22, MGS 03/23, 5-yr 3.89 1 MGS 04/23, GII 04/22 and GII 11/23 which collectively made 7-yr 3.98 0 10-yr 4.12 -1 up 43% of total trading volume for the day. Trading Source : Bloomberg momentum may remain soft amid still cautious market sentiments but the government assurance of a budget deficit target of 2.8% of GDP could potentially keep a lid on outflows. External trade numbers released yesterday was decent, Upcoming Government Bond Tenders reaffirming that economic fundamentals are still sound. Corp Bonds/Sukuk Corporate Bonds saw sustained trade volume of RM488m with well-spread interests across the curve. The AA-rated segment remained the darling of investors, collectively accounted for close to 80% of deals transacted. Names that saw substantial interests include Sime Darby Plantation, Gamuda, Southern Power and Public Islamic Bank for the banking front. In the GG segment, PASB ‘6/23, Prasa ‘9/27, DanaInfara ‘2/43 and LPPSA ‘ 9/46 saw a combined RM60m being dealt. Expect sustained appetite for Corp Bonds/Sukuk. 1 FIXED INCOME June 6, 2018 Daily Trades : Government Bonds Securities Closing Vol Previous Previous Chg YTM (RM mil) YTM Trade Date (bp) (dd/mm/yyyy) MGS 09/18 3.359 37 3.264 04/06/2018 10 MGS 07/19 3.495 4 3.468 04/06/2018 3 MGS 10/19 3.489 58 3.482 04/06/2018 1 MGS 11/19 3.494 0 3.480 04/06/2018 1 MGS 03/20 3.605 0 3.576 04/06/2018 3 MGS 07/20 3.624 1 3.693 04/06/2018 -7 MGS 10/20 3.658 40 3.666 04/06/2018 -1 MGS 07/21 3.814 5 3.842 04/06/2018 -3 MGS 09/21 3.765 9 3.820 04/06/2018 -5 MGS 11/21 3.713 16 3.728 04/06/2018 -2 MGS 03/22 3.924 67 3.878 04/06/2018 5 MGS 03/23 4.025 30 3.943 04/06/2018 8 MGS 04/23 3.836 40 3.797 01/06/2018 4 MGS 07/24 4.303 20 4.190 04/06/2018 11 MGS 09/24 4.158 8 4.140 04/06/2018 2 MGS 07/25 4.272 20 4.200 31/05/2018 7 MGS 09/25 4.253 7 4.277 04/06/2018 -2 MGS 04/26 4.301 0 4.301 01/06/2018 0 MGS 11/26 4.341 2 4.333 04/06/2018 1 MGS 11/27 4.275 3 4.315 04/06/2018 -4 MGS 06/28 4.183 70 4.182 04/06/2018 0 MGS 04/30 4.669 2 4.697 04/06/2018 -3 MGS 06/31 4.700 25 4.696 04/06/2018 0 MGS 04/32 4.732 0 4.726 01/06/2018 1 MGS 04/33 4.742 7 4.742 04/06/2018 0 MGS 05/35 4.864 17 4.864 04/06/2018 0 MGS 04/37 4.901 4 4.901 04/06/2018 0 MGS 03/46 4.933 1 4.923 01/06/2018 1 GII 08/18 3.354 10 3.281 01/06/2018 7 GII 04/19 3.544 20 3.567 04/06/2018 -2 GII 04/20 3.720 18 3.702 04/06/2018 2 GII 08/20 3.721 1 3.703 31/05/2018 2 GII 04/22 3.933 121 3.936 04/06/2018 0 GII 07/22 3.967 10 3.967 31/05/2018 0 GII 07/23 4.055 41 4.071 04/06/2018 -2 GII 11/23 4.012 120 4.022 04/06/2018 -1 GII 05/24 4.195 20 4.231 14/05/2018 -4 GII 08/28 4.456 1 4.526 01/06/2018 -7 GII 08/33 4.796 20 4.828 01/06/2018 -3 GII 05/47 5.013 0 5.000 24/05/2018 1 875 2 FIXED INCOME June 6, 2018 Daily Trades: Corp Bonds / Sukuk Securities Rating Closing Vol Previous Previous Chg Spread YTM (RM mil) YTM Trade Date (bp) Against (dd/mm/yyyy) MGS* Pengurusan Air SPV Berhad 06/23 GG 4.408 20 4.410 04/06/2018 0 58 Prasarana Malaysia Berhad [fka Syarikat Prasarana Negara Berhad] 09/27 GG 4.582 10 4.521 04/04/2018 6 43 DanaInfra Nasional Berhad 02/43 GG 5.183 10 0.000 00/01/1900 518 29 Lembaga Pembiayaan Perumahan Sektor Awam 09/46 GG 5.250 20 5.220 26/01/2018 3 35 Aquasar Capital Sdn Berhad 07/23 AAA 4.571 10 4.438 17/02/2017 13 74 EKVE Sdn Berhad 01/33 AAA 5.091 4 5.000 20/12/2017 9 47 Tenaga Nasional Berhad 08/37 AAA 5.168 1 5.179 28/05/2018 -1 27 Hong Leong Bank Berhad 06/24 AA1 4.407 10 4.497 24/05/2018 -9 45 TRIplc Medical Sdn Berhad 10/26 AA1 4.687 10 4.841 22/03/2018 -15 58 YTL Power International Berhad 05/27 AA1 5.027 5 5.037 04/06/2018 -1 88 Public Islamic Bank Berhad 08/27 AA1 4.639 40 4.597 06/04/2018 4 49 TRIplc Medical Sdn Berhad 10/27 AA1 4.741 10 4.850 10/04/2018 -11 59 TRIplc Medical Sdn Berhad 10/31 AA1 4.981 5 5.011 04/05/2018 -3 36 TRIplc Medical Sdn Berhad 10/32 AA1 5.009 5 5.090 04/04/2018 -8 39 UMW Holdings Berhad 10/19 AA2 4.438 5 4.418 03/05/2018 2 103 Bright Focus Berhad 01/31 AA2 5.396 12 5.329 12/12/2017 7 77 Fortune Premiere Sdn Berhad 03/23 AA 4.929 5 4.791 13/03/2018 14 110 Sime Darby Plantation Sdn Bhd 03/16 AA 5.388 50 5.447 24/05/2018 -6 49 Gamuda Berhad 03/19 AA3 4.310 20 4.271 27/04/2018 4 90 Bumitama Agri Ltd 03/19 AA3 4.549 20 4.586 31/05/2018 -4 114 Bumitama Agri Ltd 09/19 AA3 4.632 20 4.637 04/06/2018 0 123 Gamuda Berhad 11/22 AA3 4.777 20 4.817 23/05/2018 -4 98 Gamuda Berhad 03/23 AA3 4.827 40 4.758 30/04/2018 7 100 RHB Investment Bank Berhad 04/25 AA3 4.975 1 4.706 24/05/2018 27 95 AmBank Islamic Berhad (fka AmIslamic Bank Berhad) 12/25 AA3 4.787 1 4.764 22/12/2017 2 68 Tanjung Bin Energy Issuer Berhad 03/32 AA3 5.205 2 5.179 07/05/2018 3 58 Alpha Circle Sdn Berhad 02/21 AA- 5.401 6 5.411 18/05/2018 -1 169 Southern Power Generation Sdn Berhad 04/22 AA- 4.628 25 4.636 15/01/2018 -1 83 Southern Power Generation Sdn Berhad 10/22 AA- 4.668 15 4.563 02/04/2018 11 87 Southern Power Generation Sdn Berhad 10/25 AA- 4.843 10 4.849 15/05/2018 -1 81 Southern Power Generation Sdn Berhad 04/26 AA- 4.858 10 4.781 29/03/2018 8 75 Southern Power Generation Sdn Berhad 04/31 AA- 5.108 20 5.107 04/06/2018 0 48 Jimah East Power Sdn Berhad 12/32 AA- 5.278 20 5.294 17/05/2018 -2 65 Tan Chong Motor Holdings Berhad 11/19 A1 5.901 2 5.920 23/05/2018 -2 250 AMMB Holdings Berhad 02/28 A1 5.062 2 4.927 22/05/2018 14 87 CIMB Group Holdings Berhad 05/16 A1 5.349 1 5.350 01/06/2018 0 45 CIMB Group Holdings Berhad 05/16 A1 5.152 0 5.380 01/06/2018 -23 25 Mudajaya Corporation Berhad 01/19 A2 5.690 10 5.794 03/01/2018 -10 229 Alliance Bank Malaysia Berhad 10/25 A2 5.215 1 5.451 25/05/2018 -24 119 Bank Muamalat Malaysia Berhad 06/26 A3 5.603 2 5.620 12/02/2018 -2 150 Bank Muamalat Malaysia Berhad 11/21 A 5.483 5 5.227 07/05/2018 26 177 Mah Sing Group Berhad 03/15 - 5.614 3 5.616 04/06/2018 0 72 488 *spread against nearest indicative tenured MGS (Source : BPAM) Market/Corporate News: What’s Brewing The Malaysia Retailers Association (MRA) forecasts retail sales to be 5.3% for 2018, an improvement from the 4.7% growth in its March survey, boosted temporarily by the zero Goods and Sales Tax in June.