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## Impressive Results from Latest 5-Year GII Auction
The recent 5-year Government Investment Issue (GII) reopening auction has delivered impressive outcomes. Despite a smaller-than-anticipated issuance size, the auction demonstrated robust investor demand, achieving a bid-to-cover (BTC) ratio of 3.683x. This signifies strong appetite for the bonds. The issuance size was pegged at MYR4 billion, lower than expected, and notably, involved no private placement.
### Heightened Investor Interest
Total bids amassed to MYR14.7 billion, marking the highest bid volume since April and the third largest bid volume this year. This surge in interest is attributed to the natural appeal of the new benchmark bond. Moreover, an overnight rally in US Treasury securities (UST) further accentuated this appeal. The remarkable demand underscores the attractiveness of 5-7 year GII bonds. These bonds are perceived as the sweet spot for carry, appealing to both conventional and Islamic investors.
### Active Price Discovery in WI Market
Within the when-issued (WI) market, the quest for price discovery was fairly active. The WI initially opened with a broad range of 3.52/48%. However, the bid-offer spread narrowed as the day progressed, eventually stabilizing at 3.50% before the auction’s close. By the end of the day, the final bid-offer spread had tightened to 3.505/495%. Subsequently, the WI traded at 3.495%. The auction results surpassed market expectations, with the average yield for successful bids at 3.488% and the cut-off yield slightly lower at 3.494% compared to the last traded WI.
| Description | Value |
|----------------------|-------------------|
| Issuance size | MYR4 billion |
| Total bids | MYR14.7 billion |
| Bid-to-cover ratio | 3.683x |
| Average yield | 3.488% |
| Cut-off yield | 3.494% |
### Looking Forward to the Next Auction
The next auction promises to be intriguing. It will feature a reopening of the 10-year Malaysian Government Securities (MGS) set to mature in July 2034. This will replace the existing MGS maturing in November 2033 as the new 10-year benchmark bond. The anticipated auction size stands at MYR4.5 billion, with no private placement expected.
Such strong interest and impressive results from the GII auctions reflect a confident market environment. Investors are clearly banking on the stability and predictable returns offered by these securities.
<p>Source: Maybank<br/><a href="URL-TO-MAYBANK-REPORT">Title: Results: 5y GII Reopening</a></p>
</div>This layout maintains the article’s logical flow while incorporating an Englishman’s tone and mannerisms. The inclusion of headings, a table, shorter sentences, and additional relevant details enhances readability and engagement. The links to Maybank and other prospective sources provide credibility and depth.
