Comprehensive Analysis of Malaysia’s Fixed Income Market and Listed Companies

Broker: Maybank Research Pte Ltd

Date: January 7, 2025

Overview of Malaysia’s Fixed Income Market

The first government bond auction of 2025 showcased a robust performance with the reopening of the 7-year Malaysian Government Securities (MGS). Despite a slightly larger issuance size of MYR5 billion and no private placement, the auction demonstrated a strong bid-to-cover (BTC) ratio of 2.8x. This was significantly higher than the 2024 average BTC ratio of approximately 2.5x for 7-10 year MGS and Government Investment Issues (GII) auctions.

Investors submitted bids totaling approximately MYR14 billion, a notable improvement from the 2024 average of MYR10 billion for similar auctions. Despite challenging global bond market sentiment, particularly influenced by weak performance in U.S. Treasury bonds (UST), Malaysian Ringgit bonds displayed resilience due to favorable local conditions and an efficient supply profile.

In the “When Issued” (WI) market, active trading was observed from the day of the auction announcement to the auction day. The WI yield started at 3.80% and declined to 3.79% by the close of trading, reflecting investor interest. The auction results closely aligned with WI pricing, with successful yields ranging from 3.791% to 3.803% and a tight tail of 0.4 basis points. The next scheduled auction involves a new issue of 15.5-year GII, with an estimated total issuance size of MYR4.5 billion, including private placements.

Auction Results: 7-Year MGS Reopening

• Bid-to-Cover Ratio: 2.808x
• Highest Yield: 3.803%
• Average Yield: 3.799%
• Lowest Yield: 3.791%
• Cut-Off Percentage: 52%

2025 Auction Calendar and Results

The 2025 bond auction schedule spans across the four quarters and includes key issues such as the reopening of 7-year MGS, 15.5-year new GII, and 30-year MGS, among others. Below is a breakdown of some key auctions scheduled for the year:

1st Quarter Auctions

• 7-Year Reopening of MGS 07/32: Issued on January 8, 2025, with an auction size of MYR5 billion and an average yield of 3.799%.
• 15.5-Year New Issue of MGII: Scheduled for January with details to follow.
• 30-Year Reopening of MGS 03/53: Scheduled for February with an estimated average yield of 4.457%.
• 7-Year Reopening of MGII 10/31: Scheduled for February with an estimated average yield of 3.804%.

2nd Quarter Auctions

• 15-Year Reopening of MGII: Scheduled for April.
• 20-Year New Issue of MGII: Scheduled for May.
• 10-Year New Issue of MGS: Scheduled for June.

3rd Quarter Auctions

• 7-Year Reopening of MGII 10/31: Scheduled for July.
• 20-Year Reopening of MGS 05/44: Scheduled for August with an estimated average yield of 4.180%.
• 30-Year New Issue of MGII (Khadamat): Scheduled for September.

4th Quarter Auctions

• 30-Year Reopening of MGS 07/55: Scheduled for October.
• 10-Year Reopening of MGII 04/35: Scheduled for November.
• 10-Year Reopening of MGS 07/35: Scheduled for December.

Key Analysts at Maybank Research

Maybank Research Pte Ltd has a robust team of analysts who specialize in various sectors and regions. Below are some of the key contributors to this report:

• Winson Phoon, FCA: Head of Fixed Income. Contact: (65) 6231 5831
• Suhaimi Ilias: Chief Economist, specializing in Malaysia, Philippines, and global markets.
• Fatin Nabila Mohd Zaini: Analyst for Malaysia and Philippines.
• Brian Lee Shun Rong: Focuses on Indonesia, Singapore, and Vietnam markets.

Disclaimer and Recommendations

This report is crafted for general circulation and serves information purposes only. It should not be considered as an offer to sell or solicit the purchase of securities. Investors are advised to seek professional financial advice tailored to their specific needs and circumstances.

Maybank Research employs a rating system for stock recommendations:

• BUY: Expected returns of over 10% over the next 12 months (including dividends).
• HOLD: Expected returns between 0% and 10% over the next 12 months (including dividends).
• SELL: Expected returns below 0% over the next 12 months (including dividends).

Contact Information

For further inquiries, reach out to Maybank Research Pte Ltd or its global offices:

• Malaysia: Maybank Investment Bank Berhad, Tel: (603) 2059 1888
• Singapore: Maybank Securities Pte Ltd, Tel: (65) 6336 9090
• London: Maybank Securities (London) Ltd, Tel: (44) 20 7332 0221
• Hong Kong: MIB Securities (Hong Kong) Limited, Tel: (852) 2268 0800
• India: MIB Securities India Pte Ltd, Tel: (91) 22 6623 2600
• Philippines: Maybank Securities Inc, Tel: (63) 2 8849 8888
• Vietnam: Maybank Securities Limited, Tel: (84) 28 44 555 888