Fixed Income Research KDN PP 16084/10/2012 (030859)

Transcription

1 Fixed Income Research KDN PP 16084/10/2012 (030859) A U G U S T FINANCIAL VARIABLE JUL-17 AUG-17 M-O-M CHANGE OVERNIGHT POLICY RATE (%) bp 3-YEAR BENCHMARK MGS (%) bps 10-YEAR BENCHMARK MGS (%) bps 3-YEAR IRS (%) bps 10-YEAR IRS (%) bps RINGGIT 3-YEAR AAA (%) bp RINGGIT 3-YEAR AA (%) bp RINGGIT 3-YEAR A (%) bp 2-YEAR US TREASURY (%) bps 10-YEAR US TREASURY (%) bps MYR/USD % US DOLLAR INDEX % BRENT CRUDE (USD/BARREL) % GOLD SPOT (USD/OUNCE) 1, , % KLCI Index 1, , % S&P 500 Index 2, , % Analysts Global Markets 2 Bullish bets on global government bonds have climbed relentlessly despite the US Federal Reserve (Fed) confirming its intention to begin trimming its balance sheet later this year. In August, the benchmark 10-year US Treasury (UST) yield tumbled 17 basis points (bps) to 2.12%, the biggest monthly decline since June Tan Jack Fong Analyst jackfong@marc.com.my Lee Si Xin Analyst sixin@marc.com.my Malaysian Government Bond Market 4 Yields on local govvies ended mostly lower in August on the back of improved buying interest primarily attributed to risk-off sentiment. Net foreign buying interest for MGS resurged, supported by renewed strength in the ringgit, mounting US political tensions, dovish central banks and rising geopolitical tensions surrounding the US and North Korea. Meanwhile, in the primary market, demand was weak for the first two issues and subsequently improved in the final week for the final issue as the ringgit continued to appreciate against the US dollar. Ringgit 8 The ringgit continued to exhibit monthly bullish momentum against the US dollar for the third consecutive month in August. The ringgit was quoted 0.26% month-on-month (m-o-m) or 103 pips stronger against the US dollar at RM4.2710, rising to its strongest level for 2017 so far. The ringgit primarily garnered its strength from the bearish US dollar as well as better-than-expected 2Q2017 GDP reported. Malaysian Corporate Bond Market 9 MARC Rating Activities 12

2 Global Markets A quick review Bullish bets on global government bonds climbed despite the Fed s intention to begin trimming its balance sheet later this year. Renewed political upheaval was among the catalysts that spurred the impressive bond market rally. The retreat in bond yields was also in line with waning expectations for an immediate monetary tightening. Bullish bets on global government bonds climbed relentlessly despite the Fed confirming its intention to begin trimming its balance sheet later this year. In August, the benchmark 10-year UST yield tumbled 17 bps to 2.12%, the biggest monthly decline since June Yields on other maturities were also within spitting distance of their respective year-to-date (YTD) lows. Across the Atlantic, yields on the 10-year German Bund and UK Gilt eased off their recent highs, shedding 18 bps and 20 bps to 0.36% and 1.03% respectively. There were several catalysts that spurred the impressive bond market rally. Very little progress has been made on materialising US President Donald Trump s pro-growth agenda amid renewed political upheaval, and this had undermined investors risk appetites. His threat of shutting down the US government threat as the deadline to raise the debt ceiling, which has since been extended, loomed was also a catalyst. It had triggered warning from credit rating agencies such as Fitch that the US sovereign rating would be reviewed with potentially negative implications. Adding to the safehaven flows were the increased rhetoric on North Korea as the country conducted multiple missile tests. The substantial retreat in bond yields was also in line with waning expectations among bond investors for an immediate monetary tightening. This followed the meeting of central bankers in Jackson Hole, where Fed Chair Janet Yellen and European Central Bank (ECB) President Mario Draghi offered little insights into the future monetary policy path in their speeches. Based on Fed Funds Futures, the market implied a near certainty of no in interest rates in the September Fed policy meeting. Exhibit 1: Summary of US rates US rates (%) Jul-17 Federal Funds Rate (Upper Bound) bp 2-year UST bps 5-year UST bps 10-year UST bps 30-year UST bps Exhibit 3: Summary of UK rates UK rates (%) Jul-17 Bank of England Official Bank Rate bp 2-year Gilt bps 5-year Gilt bps 10-year Gilt bps 30-year Gilt bps Exhibit 2: Summary of euro rates Euro rates (%) Jul-17 European Central Bank Deposit Facility Rate bp 2-year Bund bps 5-year Bund bps 10-year Bund bps 30-year Bund bps Exhibit 4: Summary of Japan rates Japan rates (%) Jul-17 Bank of Japan Short-term Interest Rate bp 2-year JGB bps 5-year JGB bps 10-year JGB bps 30-year JGB bps 2

3 Exhibit 5: Sentiment in the UST market turned bullish again, with the 10-year yield breaching the lowest level YTD Exhibit 6: The steepening of the UST curve that followed hawkish rhetoric from central banks has been reversed SD - 1SD UST 10Y (%) Mean + 1SD + 2SD /2 UST Spread (bps, LHS) 30/2 UST Spread (bps, RHS) Jan-17 Mar-17 May-17 Jul Jan-17 Mar-17 May-17 Jul Exhibit 7: European bond yields eased from their recent highs as investors pared back their expectations for a monetary tightening sooner rather than later Exhibit 8: Based on Fed Funds Futures, investors are almost certain that the Fed will stand pat in its September policy meeting 1.3 Germany 10Y (%, LHS) UK 10Y (%, RHS) France 10Y (%, LHS) % Probability of no in FFR in September Probability of a FFR hike in September % % % % Mar-17 May-17 Jul-17 Source: CEIC, 3

4 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Malaysian Government Bond Market Primary market review Total outstanding of MGS and GII papers was slightly higher in August; gross issuance was offset by high volume of matured GII papers. Performance of the public auction market for local govvies closely followed the ringgit movement in August. Demand was weak during the first half of the month and subsequently improved as the ringgit rebounded. The total outstanding Malaysian Government Securities (MGS) and Government Investment Issue (GII) came up to RM635.0 billion as at end-august compared to RM634.5 billion in July. The monthly gross issuance for both MGS/GII papers stood at RM10.0 billion, similar to the previous month with GII taking the lead. The increase in gross issuance was offset by a large volume of GII that matured in August, amounting to RM9.5 billion. YTD, government financing activities through the debt market has remained robust with overall gross issuance value for MGS/GII increasing by 17.4% year-on-year (y-o-y) to RM77.5 billion from RM66.0 billion in the same period last year. The government received total bids of RM17.8 billion (July 2017: RM17.5 billion) for its targeted RM9.5 billion (MGS: RM3.5 billion, GII: RM6.0 billion) of issuance in the auction market through three government offerings. The remaining issuance of RM0.5 billion was raised by GII via private placement. Both the 20-year GII and 30-year MGS papers saw relatively weak demand, commanding bid-to-covers (BTC) of 1.8x and 1.7x, respectively. Demand for these papers was largely hindered by the weak performance of the ringgit during the first half of August, eroding foreign investors appetite for ringgit-denominated assets. However, the 10-year GII garnered a relatively healthy BTC of 2.1x, higher than the previous GII auctions since July. Demand for the issue was supported by improved performance of the ringgit in the final two weeks in August and keen local participation given the attractive spread over MGS. Overall, demand for government papers remained weak as the BTCs commanded by these papers are still below the one-year average BTC. Exhibit 9: Summary of Malaysian government securities statistics (RM billion) Gross issuance Redemption Net issuance Total outstanding MGS GII Total MGS GII Total MGS GII Total MGS GII Total Jul YTD Source: BNM Bond Info Hub, Exhibit 10: Malaysian government securities auction results in August 2017 Issues Tenure Amount Average yield Issue date BTC (x) (years) (RM mil) (%) 20-year new issue of MGII (Mat on 08/37) , year Reopening of MGS (Mat on 05/47) , year Reopening of MGII (Mat on 11/27) , Source: BNM Bond Info Hub, BNM Fast, Exhibit 11: Total outstanding MGS/GII papers grew slightly in August 2017, offset by high volume of maturing GII. Exhibit 12: Overall demand for government debt papers was weak in August Issuance (LHS) Redemption (LHS) Outstanding (RHS) 4.00 MGS GII 1-year average BTC ratio RMmillion 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - Outstanding (RM million) 660, , , , , , , , Source: BNM Bond Info Hub, Source: BNM Fast, 4

5 Secondary market review Yields on local govvies were mostly lower in August amid risk-off sentiment in global markets. Performance of MGS started to improve during the second half of August, directly tracking the performance of the ringgit. Yields on local govvies ended mostly lower in August on the back of improved buying interest primarily attributed to risk-off sentiment. The total monthly trading volume had surged to RM41.2 billion from RM32.4 billion, with MGS making 92.4% of the trades. Most of the buying interest of local govvies was concentrated on the belly to the back-end of the yield curve. At end-august, the benchmark MGS yield curve was seen bullishly flattened with yields six bps higher on the three-year note while yields along the 5y20y curve dipped to between three bps and 14 bps. During the first half of the month, the yields on MGS hardly moved as investors refrained from taking additional positions amid a heavy data period from both the US and Malaysia and ahead of the 2017 Jackson Hole Economic Symposium. Buying interest for MGS also dissipated after the release of disappointing June exports data. Of note, the benchmark yield on the 3y MGS at the short-end of the curve spiked at the end of the first half of the month amid better-than-expected US retail sales data in July that led to heightened expectations of a Federal Fund Rate (FFR) hike in September. However, sentiment for the MGS market turned positive during the second half of the month as net foreign buying interest resurged amid the renewed strength in the ringgit, mounting US political tensions, dovish July Federal Open Market Committee (FOMC) minutes, lack of new clues on policy direction offered at the 2017 Jackson Hole Economic Symposium and risk-off sentiment emanating from the ongoing escalating North Korea crisis. MGS also gained on positive economic data releases such as the softer July CPI and the better-than-expected 2Q2017 GDP. Exhibit. 13: Daily performance of three- and 10-year MGS yields throughout August 2017 Volume (RM million, RHS) 3Y MGS (LHS) 10Y MGS (LHS) *MGS yields being rebased to 100 on 31 July , June trade data release Trump responded aggressively against North Korea's nuclear threat New UN sanctions imposed on North Korea US July retail sales data release The ringgit started to depreciate against the US dollar Press release of the Fed's July FOMC minutes 2Q2017 GDP data release July CPI data release 2017 Jackson Hole Economic Policy Symposium The ringgit at its strongest daily close for 2017 YTD North Korean missile flew over Hokkaido 3,000 2,500 2,000 1,500 1, Source: Bloomberg, BPAM, Exhibit 14: MGS benchmark yields MGS yields Jul-17 3-year MGS 3.30% 3.36% 6 bps 5-year MGS 3.70% 3.56% -14 bps 7-year MGS 3.91% 3.85% -6 bps 10-year MGS 3.99% 3.89% -10 bps 15-year MGS 4.41% 4.31% -10 bps Exhibit 15: OPR and Interest Rate Swap (IRS) rates Rates Jul-17 Overnight Policy Rate 3.00% 3.00% 0 bp 1-year IRS 3.50% 3.50% 0 bp 3-year IRS 3.65% 3.63% -2 bps 5-year IRS 3.76% 3.73% -3 bps 10-year IRS 4.00% 3.97% -3 bps 5

6 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 May-16 Nov-16 May-17 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Apr-16 Jun-16 Exhibit 16: MGS yield curves Exhibit 17: MYR IRS curves m-o-m (RHS) end-july (LHS) end-august (LHS) % bps Maturities (Years) Y 5Y 7Y 10Y Exhibit 18: Malaysia s 5-year Credit Default Swap (CDS) curve Malaysia 5-year CDS (bps) Exhibit 19: 10Y/3Y MGS spread Y/3Y MGS Spread (bps) Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Apr-16 Jun-16 Exhibit 20: Top local govvies trades for August 2017 Security Traded amount (RM mil) Issue tenure (Years) Last traded yield MGS 2/ % , % GII MURABAHAH 4/ % , % MGS 4/ % , % MGS 5/ % , % MGS 2/ % , % Source: BPAM, Exhibit 21: Summary of MGS trading volume (RM million) based on maturity profile < 3M 3M -6M 6M - 1Y 1Y - 2Y 2Y - 3Y 3Y - 5Y 5Y - 7Y 7Y 10Y > 10Y Jul-17 3,283 1, ,646 1,861 3,925 3,035 7,292 6,694 3,555 1, ,410 3,955 6,832 3,370 7,347 8, ,094 2, ,674 Source: BPAM, 6

7 Jan-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Foreign holdings Foreign investors were net sellers of local bonds in August amid large redemption of GII papers, cushioned by large foreign inflows into MGS that tracked the performance of the ringgit. The local bond market continued to experience net foreign outflows for the third consecutive month in August. Foreign holdings of local bonds posted a net foreign outflow of RM0.7 billion to a total of RM191.8 billion with the bulk of it contributed by GII amid a large redemption volume of RM9.5 billion. At end-august, total foreign holdings of GII stood at RM16.4 billion compared to RM19.6 billion recorded at end-july. Meanwhile, foreign holdings of Malaysian Treasury Bills (MTB) recorded a net outflow of RM0.5 billion in August. However, net foreign inflows were seen for Bank Negara Notes (BNMN) (+RM0.3 billion), corporate bonds (+RM0.6 billion) and MGS (+RM2.1 billion). Foreign holdings of MGS grew to RM151.0 billion at end-august compared to RM148.9 billion recorded at end-july and was the highest net foreign holding amount recorded for MGS since February. This was largely due to the flight to safety emanating from the North Korean crisis coupled with improving economic fundamentals that have lifted the ringgit. The softening inflation in July was also a contributory factor for the increased buying interest in MGS. Exhibit 22: Summary of foreign holdings in local govvies Foreign holdings (RM mil) Composition (%) Foreign flows (RM mil) Jul-17 Jul-17 Jul-17 MGS 148, , ,083 GII 19,567 16, ,189 MGS+GII 168, , ,460-1,106 Treasury bills Total 169, , ,753-1,565 Source: BNM, BPAM, Exhibit 23: Foreign holdings of ringgit bonds as percentage of total outstanding Exhibit 24: Foreign holdings in local bonds continued to decline in August, driven by large volume of matured GII 63.5% 53.5% 43.5% 33.5% Total foreign holdings (RM million, RHS) MGS GII Corporate bonds Total 250, , % 150,000 RM million 15,000 10,000 5,000 - (5,000) MGS GII Others Total foreign holdings (%) 21.0% 20.0% 19.0% 18.0% 23.5% 13.5% 3.5% 100, % 50, % 4.5% - (10,000) (15,000) (20,000) (25,000) (30,000) 17.0% 16.0% 15.0% 14.0% Source: BNM, BPAM, Source: BNM, BPAM, 7

8 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Apr-16 Jun-16 Ringgit Against the US dollar The ringgit continued to rise m-o-m against the US dollar in August amid broad weakness in the US dollar. The ringgit continued to exhibit monthly bullish momentum against the US dollar for the third consecutive month in August. The ringgit was quoted 0.26% m-o-m or 103 pips stronger against the US dollar at RM4.2710, rising to its strongest level for 2017 so far. The ringgit primarily garnered its strength from the bearish US dollar amid ongoing low inflation woes, mounting political tensions and rising concerns over economic costs of Hurricane Harvey. These factors have downplayed the possibility of a third FFR hike in the FOMC meeting in September. The ringgit was also supported by high foreign reserves reported by Bank Negara Malaysia (BNM) and the flux of foreign inflows into the local govvies market in August amid the risk-off sentiment in global markets due to the ongoing geopolitical tensions surrounding the US and North Korea. Furthermore, the ringgit was also buoyed by the better-than-expected 2Q2017 GDP growth of 5.8% y-o-y. Against other major currencies The ringgit had rebounded against most major currencies except the euro. The ringgit was quoted higher against most major currencies m-o-m at end-august. It was traded higher against the pound sterling, the Singapore dollar and the Japanese yen at RM5.5143, RM and RM per JPY100 from RM5.6081, RM and RM per JPY100, respectively. However, the ringgit continued to weaken m-o-m against the euro at RM from RM previously. Exhibit 25: Asian currencies against USD (% m-o-m) Exhibit 26: Major currencies against MYR (% m-o-m) Offshore Chinese renminbi Thai baht Indian rupee The USD w as w eaker against most A sian currencies Offshore Chinese renminbi Euro Swiss franc Ringgit was firmer against most major currencies Malaysian ringgit 0.26 Thai baht Taiwanese dollar Japanese yen Taiwanese dollar Indonesian rupiah USD Strengthened USD w eakened Japanese yen US dollar Singapore dollar MYR strengthened MYR weakened Singapore dollar -0.1 Indonesian rupiah -0.4 Hong Kong dollar -0.2 Hong Kong dollar -0.5 South Korean won -0.5 South Korean won Australian dollar Philippine peso -1.4 Pound sterling Exhibit 27: Daily performance of the ringgit versus FBM KLCI, BRENT crude and 10y MGS Exhibit 28: Monthly performance of the ringgit versus foreign holdings of short-term local bonds and MGS RM151.2 mil foreign Foreign investors disposed Foreign investors disposed Foreign investors disposed 4.25 RM36.2 mil foreign flow into Bursa. RM63.1 mil from Bursa. RM48.5 mil from Bursa. RM382.1 mil from Bursa. flow into Bursa *KLCI, Brent & 10y MGS rebased to 100 at 31st July Foreign Holdings of ST Papers (RM billion, LHS) MYR/USD (Reverse scale, RHS) Foreign Holdings of MGS (RM billion, LHS) KLCI Brent 10y MGS USD/MYR (Reverse order, RHS) Source: Bloomberg, MIDF, Source: Bloomberg, BNM, 8

9 Malaysian Corporate Bond Market Gross issuance of corporate papers grew significantly in August amid large issuances from the rated corporate bonds segment. YTD gross issuance of corporate bonds recorded the highest amount since In August, the primary market for corporate bonds was vibrant with the gross issuance of long-term issues coming in higher at RM8.7 billion (July: RM2.8 billion), the highest monthly issuance for the year since May (RM13.4 billion). All bond segments registered increases in gross issuance except for Cagamas bonds which declined by RM0.6 billion to RM0.4 billion. The rated corporate bonds segment led the primary market for corporate bonds, rising by RM4.4 billion to RM5.8 billion in August while both the unrated corporate bonds and unrated government guaranteed bonds segments rose by RM0.2 billion and RM1.8 billion to RM0.7 billion and RM1.8 billion, respectively. The rated corporate bonds segment was dominated by Tenaga Nasional Bhd s dual-tranche issuance of Medium-Term Notes (IMTN) and Celcom Networks Sdn Bhd s triple-tranche IMTN amounting to RM2.0 billion and RM1.0 billion, respectively. The YTD gross issuance for corporate bonds rose to RM66.3 billion from RM59.3 billion in the same period last year, and was the highest YTD amount recorded since 2012 (RM88.4 billion). The top three issuers were DanaInfra Nasional Bhd (RM7.2 billion), Cagamas (RM4.9 billion) and Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) (RM4.0 billion). Exhibit 29: Summary of corporate bond issuance in August 2017 (RM billion) Year Unrated corporate bonds Unrated governmentguaranteed Total unrated Rated corporate bonds Cagamas Total rated Total corporate bonds Jul Source: BPAM, Exhibit 30: Historical trend of bond issuance by category (RM billion) Year Unrated corporate bonds Unrated governmentguaranteed Total unrated Rated corporate bonds Cagamas Total rated Total corporate bonds YTD Source: BPAM, Note: Numbers may not necessarily add up to total due to rounding. Exhibit 31: Notable corporate bond issuers in August 2017 (issue size of RM1 billion and above) Issuer Industry Category Principle Tenaga Nasional Berhad Infrastructure & utilities Perbadanan Tabung Pendidikan Financial Tinggit Nasional Services Celcom Networks Sdn Bhd Infrastructure & utilities Source: BPAM, No. of issues Amount (RM bil) Tenure (Years) Coupon (%) AAA rated GG AA rated

10 Exhibit 32: The primary market for corporate bonds continued to be dominated by issuers from the financial services sector Exhibit 33: Outstanding size of Cagamas and corporate bonds as of August 2017 (RM billion) Financial services RM billion 36.4 Asset class Conventional Total Infrastructure & utilities 11.2 Property & real estate Trading & services Mining & petroleum Diversified holdings Asset-backed securities Cagamas 7% AAA 20% Cagamas Corporate Bonds Corporate Public finance Industrial products Construction & engineering Transportation Plantation & agriculture GG 31% Unrated 16% A & below 3% AA 23% Corporate guaranteed Financial ABS Source: BPAM, Source: BPAM, Exhibit 34: Corporate bonds outstanding: Conventional & Exhibit 35: Corporate bonds outstanding: Distribution by rating band 66% AAA 27% AA 41% Conventional 34% Cagamas 7% Short-term 2% Not rated 17% BBB & below 2% A 4% Source: BPAM, Source: BPAM, Exhibit 36: AAA corporate benchmark yields AAA (%) Jul-17 3-year 4.15% 4.14% -1 bp 5-year 4.30% 4.11% -19 bps 7-year 4.46% 4.46% -1 bp 10-year 4.66% 4.64% -2 bps Exhibit 37: AA/AA2 corporate benchmark yields AA/AA2 (%) Jul-17 3-year 4.47% 4.47% -1 bp 5-year 4.64% 4.63% -1 bp 7-year 4.80% 4.82% 1 bp 10-year 5.02% 5.02% 0 bp Exhibit 38: A/A2 corporate benchmark yields A/A2 (%) Jul-17 3-year 6.11% 6.11% 0 bp 5-year 6.67% 6.64% -3 bps 7-year 7.19% 7.16% -3 bps 10-year 8.03% 7.96% -7 bps Exhibit 39: AAA, AA/A2, A/A2 blended credit spreads AAA, AA/A2 & A/A2 (%) Jul-17 3-year 182 bps 176 bps -7 bps 5-year 176 bps 186 bps 10 bps 7-year 187 bps 192 bps 5 bps 10-year 227 bps 233 bps 7 bps 10

11 Jan-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Jan-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Exhibit 40: AAA corporate bonds yield spread (bps) Exhibit 41: AA/AA2 corporate bonds yield spread (bps) 110 3Y 5Y 7Y 10Y 150 3Y 5Y 7Y 10Y Exhibit 42: A/A2 corporate bonds yield spread (bps) Exhibit 43: 5-year blended credit spread (bps) Y 5Y 7Y 10Y year average 200 Jan-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 May-16 Nov-16 May-17 Exhibit 44: Secondary market volume (RM billion) Asset class Jul-17 MGS/GII Cagamas FI corporate Non-FI corporate Source: BPAM, Exhibit 45: Non-FI corporate traded by rating band (RM billion) Rating band Jul-17 AAA AA A BBB and below Short-term Source: BPAM, 11

12 MARC Rating Activities In August, MARC reaffirmed 14 issue ratings from 10 issuers, one counterparty credit rating and three financial strength ratings; assigned two initial ratings and one preliminary rating; and withdrew Special Port Vehicle Bhd s rating on its asset-backed serial bonds facility. In August, MARC reaffirmed 14 issue ratings from 10 issuers with the rating outlook for 13 issues remaining stable and one remaining negative. Four issues were from Cagamas Bhd, two issues were from Ranhill Powertron II Sdn Bhd and the remaining eight issues were from Celcom Networks Sdn Bhd, Hong Leong Financial Group Bhd (HLFG), Development Bank (IDB), Kapar Energy Ventures Sdn Bhd (KEV), Lebuhraya Duke Fasa 3 Sdn Bhd, Malayan Banking Bhd (Maybank), Putrajaya Bina Sdn Bhd and TNB Northern Energy Bhd, respectively. MARC also reaffirmed the counterparty credit rating for Danajamin Nasional Bhd (Danajamin) as well as the financial strength ratings for Danajamin, Development Bank and Maybank. MARC assigned final ratings of AAA IS and AA+ IS to Danajamin s Senior and Subordinated Sukuk Murabahah respectively of up to RM2.0 billion with a stable outlook. In the same month, MARC assigned a preliminary rating of MARC-1 to Titijaya Land Bhd s proposed RM150 million Commercial Papers (ICP) Programme with a stable outlook as well. MARC has also withdrawn its rating of AAA on Special Port Vehicle Bhd s asset-backed serial bonds facility following the full redemption and subsequent cancellation of the facility. Meanwhile, there were no rating migrations and no new issues placed under MARCWatch in August Exhibit 46: List of rating actions in August 2017 Principle Category Main sector Issuer Project Finance Infrastructure & Utilities Source: Lebuhraya Duke Fasa 3 Sdn Bhd *Combined limit of RM2.0 billion under the sukuk programme. 24- AFFIRMED STA AA- AA- 3,640 Unspecified Financial Strength Finance Danajamin Nasional Bhd 23- AFFIRMED STA AAA AAA - Unspecified Counterparty Credit Rating Finance Danajamin Nasional Bhd 23- AFFIRMED STA AAA AAA MARC-1 MARC-1 - Corporate Debt Finance Danajamin Nasional Bhd 23- INITIAL STA AAA AAA Corporate Debt Finance Danajamin Nasional Bhd 23- INITIAL STA AA+ AA+ Corporate Debt Property Titijaya Land Bhd 23- PRELIMINARY STA MARC-1 MARC Conventional Corporate Debt Unspecified Project Finance Corporate Debt Financial Strength Finance Infrastructure & Utilities Financial Institution Financial Institution Hong Leong Financial Group Bhd Kapar Energy Ventures Sdn Bhd 17- AFFIRMED STA AA AA MARC-1 MARC-1 1, AFFIRMED STA AA+ AA+ 2,000 Development Bank 15- AFFIRMED STA AAA AAA 400 Development Bank 15- AFFIRMED STA AAA AAA MARC-1 MARC-1 - Conventional Structured Finance Construction Special Port Vehicle Bhd 08- WITHDRAWN AAA AAA 1,310 Corporate Debt Finance Cagamas Bhd 07- AFFIRMED STA AAA AAA 40,000 Corporate Debt Finance Cagamas Bhd 07- AFFIRMED STA AAA AAA 4,000 Corporate Debt Finance Cagamas Bhd 07- AFFIRMED STA MARC-1 MARC-1 1,000 Corporate Debt Infrastructure & Utilities Celcom Networks Sdn Bhd 07- AFFIRMED NEG AA+ AA+ 5,000 Corporate Debt Finance Cagamas Bhd 07- AFFIRMED STA MARC-1 MARC-1 20,000 Unspecified Financial Strength Finance Malayan Banking Berhad 04- AFFIRMED STA AAA AAA MARC-1 MARC-1 - Conventional Corporate Debt Finance Malayan Banking Berhad 04- AFFIRMED STA AAA AAA 10,000 Project Finance Property Putrajaya Bina Sdn Bhd 03- AFFIRMED STA AAA AAA 1,580 Project Finance Project Finance Project Finance Infrastructure & Utilities Infrastructure & Utilities Infrastructure & Utilities Date announced Rating action Rating outlook Long-term rating Short-term rating Issue size Credit (RM mil) enhancement Before After Before After Ranhill Powertron II Sdn Bhd 01- AFFIRMED STA AA AA 360 Ranhill Powertron II Sdn Bhd 01- AFFIRMED STA AAA AAA 350 fg TNB Northern Energy Bhd 01- AFFIRMED STA AAA AAA 1,625 2,000* 12

13 Exhibit 47: MARCWatch placements, by issue count Exhibit 48: Upgrades, downgrades and defaults in the MARC universe, by issue count MARCWatch NEG MARCWatch DEV Upgrades Downgrades Defaults DEC-11 DEC-12 DEC-13 DEC-14 DEC-15 DEC-16 AUG YTD Source: Source: 13

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