KUALA LUMPUR (April 26): Yield for 30-year Malaysian Government Securities (MGS) topped 5% at its highest on record on Monday (April 25) on a lack of investor support for the bonds as the ringgit weakened further against the US dollar at above 4.3500, according to economists and bond analysts.

"In the local bond space, support is still lacking as light selling action pushed yields higher again today as the long ends bear-steepened. The MGS 30Y was given at 5.049%, the highest ever in terms of absolute yield since the 30Y benchmark debuted in September 2013," AmBank (M) Bhd economists wrote in a note on Tuesday.

"The ringgit, on the other hand, ground higher against the USD in line with the overall dollar strength, closing the day (Monday) at the 4.3570 level," they said.

Similarly, RHB Research said in its fixed-income strategy note that MGS and Malaysian Government Investment Issues (MGII) markets continue to be under pressure on Monday, with values seen across benchmark.

“The short-end underperformed as yields up by 6-7bps, while the MGS 30Y yield broke the 5.00% barrier to settle at 5.05%.

“We expect the details of the MGS 7Y ‘4/29 to be released today, with the closest peer MGS ‘8/29 seen traded higher at 4.451% (+12.4bps). The MGS7s/10s gap narrowed to 1bp, with prospect of upward yield in MGS7YR from the auction to push MGS 10Y yield further north,” said RHB Research.

US Treasury (UST), on the other hand, gained on Monday as yields fell over concern of slowing growth from aggressive tightening and lockdowns in China; UST 10-year yield fell 8bps to 2.82%, RHB Research noted.

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