KUALA LUMPUR, Dec 3 ― Bursa Malaysia Derivatives (BMD) has successfully launched the enhanced five-year Malaysian bond futures product, or better known as FMG5, on December 1, 2014.
In a statement here today, Bursa Malaysia Bhd chief executive officer, Datuk Tajuddin Atan, said the enhancements were intended to improve the appeal of the product.
“The widened duration will allow us to provide greater diversification in the contract basket which we were not able to before.
“Certainly, the price accuracy and extended trading hours offer greater transparency and flexibility to traders,” he said.
Bursa Malaysia said the enhanced FMG5 has three changes:
The extension of the close of trading time from 5pm to 6pm to capture any activity of the bonds in the European time zone;
The final settlement is now based on actual market trades reported on Bursa Malaysia’s Electronic Trading Platform for bond, instead of previously based on Reuters; and,
The eligibility within the basket of bonds is now widened, where the time of expiry is increased from a range of 4.5 to 5.5 years compared to four to six years previously and the current minimum issuance size of RM500 million will no longer have a minimum requirement.
It said the changes were made after industry consultation and approval from the Securities Commission Malaysia in October. ― Bernama
