The Thomson Reuters BPAM All Bond Index has gained momentum and increased 0.14 per cent to close at 129.47 as compared to 129.29 last week.
Market players were bullish on the MGS, pushing yields down across all tenure from one to 20 years.
Yield levels of selected good papers such as the AAA-rated Putrajaya and Manjung Sukuk were seen trading lower this week.
However, for most of the week, market players were seen sidelined ahead of the final monetary policy meeting scheduled for next week.
The list of top 10 most actively traded bonds this week is dominated by sovereign papers.
Total trading volume bounced back to RM12.63 billion from RM8.57 billion seen last week.
On Oct 30, 2012, the tender for the reopening of the 10-year benchmark MGS bond received weak demand with a bid-to-cover ratio of 1.638 times, closing with an average yield of 3.476 per cent.
The highest and lowest yield for the tender was 3.489 per cent and 3.461 per cent respectively.
On Oct 31, 2012, Cagamas Bhd (Cagamas), the national mortgage corporation, issued three tranches of bonds totaling RM 570 million.
The bonds were issued with coupon rates of 3.45 per cent, 3.91 per cent and 4.17 per cent for tenures of three years, 10 years and 15 years respectively.
Cagamas is rated AAA with stable outlook by both RAM Ratings and MARC.
Sabah Development Bank Bhd, a development financial institution wholly owned by the Sabah State Government, issued a RM100 million 1-year bond on October 29, 2012 and another RM10 million one year bond on Oct 31, 2012.
Both the bonds were issued with a coupon rate of 3.55 per cent and are rated AA1 by RAM Ratings.
On Nov 2, 2012, Dijaya Corporation Bhd, a property developer, issued RM130 million worth of bonds guaranteed by RHB Bank Berhad and RM85 million worth of bonds guaranteed by AmBank (M) Bhd.
The bonds guaranteed by RHB Bank are rated AA2(bg) and carry coupon rates of 3.93 per cent, 4.03 per cent, 4.15 per cent and 4.27 per cent for tenures of two years, three years, four years and fi ve years respectively.
On the other hand, the bonds guaranteed by AmBank are rated AA3(bg) carry coupon rates of four per cent, 4.10 per cent, 4.22 per cent and 4.34 per cent for tenures of two years, three years, four years and five years respectively.
On Oct 29, 2012, RAM Ratings reaffirmed the AA3 rating of Kesas Sdn Bhd’s (Kesas) sukuk and revised the outlook on the long-term rating from stable to negative.
Kesas is the toll concessionaire for the Shah Alam Expressway.
The negative outlook signals that the rating of the sukuk may come under downward pressure if Kesas continues making distributions to its shareholders, thereby eroding the company’s future cash buffers.
This follows a RM48.5 million dividend payment to Kesas’ shareholders in FYE March 31, 2012 and a lumpy RM278 million that will come due under the BaIDS in fiscal 2014, relative to the Company’s projected pre-financing cashflow of RM197 million for the same year.
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