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KUALA LUMPUR, April 15 — The primary corporate bond market has been exceptionally active in March 2021, with overall issuance swelling to RM23.8 billion, the biggest monthly issuance since May 2019, according to RAM Rating Services Bhd (RAM Ratings).
The credit rating agency said the number of issuers also hit a record high, with 39 entities tapping corporate bonds in March, from nine and 22 entities in the prior two months.
“The robust activity can be partly attributed to front-loading of firms’ financing needs to lock in lower interest rates, given substantial upward pressure on bond yields in the last two months,” it said in a statement, today.
RAM Ratings said the benchmark 10-year Malaysian Government Securities (MGS) yield surged 39.5 and 17.4 basis points month-on-month as at end-February and end-March, respectively, amid global bond market sell-off in response to rising inflation expectations and brighter economic prospects.
Meanwhile, the agency said MGS and Government Investment Issues were a robust RM16.5 billion last month compared to RM12 billion in February.
Concurrently, it said short-term government papers, namely Malaysian Treasury Bills and Malaysian Islamic Treasury Bills also accelerated to RM6.0 billion from RM3.5 billion in February.
It said foreign demand remained resilient, with a net foreign inflow of RM5.9 billion — the eleventh successive month of net foreign purchases.
“The sustained inflows lifted the proportion of foreign-held Malaysian bonds to 14.5 per cent as at end-March, the highest level since April 2018,” it added. — Bernama