Between end-June and end-September, the yield curve for Malaysian local currency (LCY) government bonds flattened, with rates rising at the very short-end while falling along the rest of the curve. In October, yields fell at the very-short end to the belly of the curve, but rose slightly at the long-end reflecting concerns over global economic stability. Yields at the very short-end to the belly fell between 2 basis points (bps) and 10 bps in October, while yields at the long end rose between 1 bp and 5 bps. The drop at the short-end and the rise at the long-end of the curve widened the yield spread between 2- and 10-year maturities to 76 bps from 60 bps at end-September.
The total amount of outstanding LCY bonds increased 16.5% y-o-y to MYR840 billion at end-September, as LCY government and corporate bonds each posted double-digit growth. Outstanding LCY government bonds rose 19.8% y-o-y to MYR505 billion, led by central bank bills, which expanded 57.0%. Excluding central bank bills, outstanding LCY government bonds increased 10.7% y-o-y. Meanwhile, outstanding LCY corporate bonds increased 11.8% y-o-y to MYR335 billion.
Amendments to the Securities Act 1993 and Capital Markets and Services Act 2007 (CMSA), pursuant to strategies outlined in the Capital Market Masterplan 2, came into force on 3 October.
The amendments include (i) a legal framework for the private retirement scheme industry, (ii) licensing provisions in the CMSA, (iii) regulations pertaining to over-the-counter (OTC) derivatives and a framework for reporting OTC derivative contracts, (iv) a framework to enable the Audit Oversight Board to grant recognition to foreign auditors, and (v) authority for the SC to obtain information considered necessary for the purpose of monitoring, mitigating and managing systematic risks; and to issue directives for managing systemic risk.