StanChart stays positive on MGS
Published on: Friday, October 21, 2016
Kuala Lumpur: Standard Chartered Global Research said it is staying positive on Malaysian Government Securities (MGS), as local demand for long-end bonds remains healthy due to high cash on hand.In a note Thursday, the research house said it believes the 2017 Budget announcement today, will be neutral for the rates market in the medium term.Standard Chartered Global Research said this is despite gross supply possibly increasing modestly due to higher MGS redemptions of around RM47 billion in 2017, versus RM26 billion last year.
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"Based on the 2017 fiscal deficit target of 3.0 per cent of gross domestic product, we estimate gross borrowing of RM107 billion, comprising new funding needs of RM40 billion, and MGS and Government Investment Issues (GII) redemptions of RM67 billion. "We also expect the government to split gross issuance of MGS bonds and GII at 55:45, versus 51:49 in 2016," it said.Stay up-to-date by following Daily Express’s Telegram channel.
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