Skip to content
  • Group
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • Careers
  • Services
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Newsfeed
    • Latest@MARC
  • Events & CSR
  • Contact Us
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
Menu
  • Group
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • Careers
  • Services
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Newsfeed
    • Latest@MARC
  • Events & CSR
  • Contact Us
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
  • Sign In
  • Subscribe
  • Group

    Group

    The MARC Group of Companies comprises MARC Ratings, MARC Solutions, MARC Data and MARC Learning.

    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning

    MARC Ratings

    • Rating Guide
    • Rating Process
    • Rating Symbols & Definitions
    • Rating Methodologies
    • Regulatory
    • Lead Managers

    MARC Solutions

    MARC Data

    MARC Learning

    • Careers
    • Careers
  • Services

    Services

    MARC's subsidiaries each provide distinct product offerings and services.

    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights

    Insights

    Find the vital information you need and stay up to date with the latest news from MARC.

    • Rating Announcements
    • Research & Analysis
    • Views
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Latest@MARC
    • MARC in the Media
    • Latest@MARC
  • Events & CSR

    Events & CSR

    MARC organises a diverse range of events throughout the year to engage with all stakeholders.

    • MARCares
    • Events
    • MARCares
    • Events
  • Contact Us

    Contact Us

    Let's get the conversation started - Get in touch with us!

    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
MARC Online
Subscribe
Menu
  • Group
  • Services
  • Insights
  • Events & CSR
  • Contact Us
Menu
  • Group
  • Services
  • Insights
  • Events & CSR
  • Contact Us
Credit Ratings & Related Assessments
Sustainability- Related Assessments
Economic & Fixed-Income Analysis
Subscriptions
Sustainability- Related Advisory
Debt Advisory
Analytics Consulting Services
Data Analytics
Credit Reporting
Learning Programme

Credit Ratings & Related Assessments

Sustainability- Related Assessments

Economic & Fixed-Income Analysis

Subscriptions

Sustainability- Related Advisory

Corporate & Debt Restructuring Advisory

Analytics Consulting Services

Data Analytics

Credit Reporting

Learning & Customised Programme

  • Insights
  • Latest@MARC
Corporate

Gross issuance of government and corporate bonds to remain robust in 2020

View Reports

Contacts

Posted Date: January 23, 2020

Yields on local govvies ended 2019 significantly lower compared to the preceding year with Malaysian Government Securities (MGS) taking the lead. The decline in yields was mainly driven by easing monetary policies adopted by global central banks against the backdrop of a sluggish global economic outlook. In addition, Bank Negara Malaysia (BNM) had lowered the overnight policy rate to 3.00% in 2019 and again to 2.75% in January 2020 (2018: 3.25%). Meanwhile, the statutory reserve requirement ratio was reduced to 3.00% in 2019 (2018: 3.50%), boosting the appeal for local govvies.

After falling to multi-year lows in 2019, we expect yields on govvies to be rangebound, almost similar to the levels seen in 2H2019. Yields would be suppressed by Malaysia's tepid inflation growth, increasingly dovish global central banks and the renewed strength of the ringgit. However, MARC believes that MGS yields are unlikely to fall below their 2019 levels due to several downside risks that still remain.

Notwithstanding this, we remain cautious about the possibility of the exclusion of Malaysian bonds by FTSE Russell from its World Government Bond Index (WGBI) in its upcoming review in March 2020 or later. Such an event could push up MGS yields given that the proportion of foreign holdings of local bonds had already risen in recent months. Adding to this, uncertainties over future US-China trade deals continue to affect investor sentiment. As such, MARC foresees the average yield on the 10y MGS to be around 3.0% to 3.5% in 1H2020.

In the primary market, MARC expects the gross issuance of MGS/Government Investment Issues (GII) to come in at between RM110.0 billion and RM120.0 billion. MARC's forecast is based on the government's projection of a federal government budget deficit of RM51.7 billion and an expected redemption value of RM70.7 billion in 2020.

Bidding interest would continue to stay strong for the upcoming MGS/GII auctions in 2020. We expect the current low yield levels and ample supply of long-dated GII papers to continue attracting strong interest from investors.

For the corporate bonds segment, MARC is projecting a gross issuance of between RM110.0 billion and RM120.0 billion. MARC's latest projection is premised on expectations of the current accommodative monetary policy stance adopted by BNM, the higher private investment growth expected for 2020 as well as the current low-yield environment.

Foreign appetite for local bonds improved in 2019 as reflected in their holdings which increased by RM19.9 billion to RM204.7 billion, the highest level recorded since 2012, in stark contrast to a net foreign outflow of RM21.9 billion in 2018. Going into 2020, MARC is of the view that the level of foreign holdings would be modest due to several key factors such as the possibility of the exclusion of Malaysian government bonds from FTSE Russell's WGBI and Malaysia's economy expanding below its growth trend in 2020.

Contacts:
Tan Jack Fong, +603-2717 2958/ jackfong@marc.com.my;
Lee Si Xin, +603-2717 2942/ sixin@marc.com.my;
Nor Zahidi Alias, +603-2717 2936/ zahidi@marc.com.my.

You May Also Like To Read

See All
Ratings

Banking Sector Insights - Weathering the Headwinds

1 December, 2022

Events

MARC360:
Property Outlook 2023
Virtual Discussion

14 December, 2022

Corporate

MARC embarks on corporate realignment to gear up for growth

1 December, 2022

See All

Let’s get started.

Subscribe to our mailing list today

Subscribe Now
Group
  • About MARC
  • Leadership
  • Investor Relations
  • Notable Issuances
  • Careers
Regulatory
  • Rating Reviews Summary
  • List of Defaults
  • List of Credit Ratings Published
  • List of Entities on Rating Watch
Services
  • Credit Ratings & Related Assessments
  • Sustainability-Related Assessments
  • Economic & Fixed-Income Analysis
  • Sustainability-Related Advisory
  • Corporate & Debt Restructuring Advisory
  • Subscriptions
  • Analytics Consulting Services
  • Data Analytics
  • Credit Reporting
  • Learning & Customised Programmes
Subsidaries
  • MARC Ratings
  • MARC Learning
  • MARC Data
  • MARC Solutions
Insights
  • Rating Announcements
  • Research & Analysis
  • Views
  • Latest@MARC
  • MARC in the Media
Events
  • Corporate Events
  • Corporate Social Responsibility (CSR)
  • Advertise with MARC
Contact Us
  • Contact Us
  • Service Level Feedback Form
  • Publication Feedback Form
  • Whistleblowing
  • Group
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • Careers
  • Services
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Newsfeed
    • Latest@MARC
  • Events & CSR
  • Contact Us
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
Terms & Conditions
Privacy Notice
Copyright Notice
Whistleblowing
PDPA Notice
© 2023 Malaysian Rating Corporation Berhad. All rights reserved.
Facebook Twitter Linkedin

Join MARC Mailing List

I would like to subscribe this mailing list. Please tick whichever is applicable

I agree/ do not agree (please tick whichever is applicable) to receive future events, conferences or marketing materials from MARC. *

Privacy Notice *

Declaration *