Strong Demand For 30-Year GII Reopening, Auction Draws Nearly RM10 Billion In Bids

Malaysia’s latest 30-year Government Investment Issue (GII) reopening auction saw robust investor interest, with a bid-to-cover ratio of 3.295 times, exceeding market expectations despite a rare scheduling of back-to-back ultra-long bond issuances this week.

The RM3 billion offering was met with total bids amounting to approximately RM9.9 billion, surpassing the year-to-date (YTD) average of RM9.2 billion for 15- to 30-year MGS/GII auctions. An additional MYR2 billion was privately placed, bringing the total issuance size to RM5 billion.

Market observers noted that the strong demand came despite some profit-taking pressure in the belly of the yield curve and a relatively tight trading range in the “when-issued” (WI) market leading up to the auction. Most of the morning saw a standoff between buyers and sellers, with WI quotes hovering 2-3 basis points apart. However, as the auction approached closing, the WI narrowed to 4.02/01% and was swiftly taken, indicating heightened investor appetite.

The final auction results showed a highest accepted yield of 4.018%, a lowest yield of 4.000%, and an average yield of 4.010%, with 62% of bids being accepted. Analysts noted the yields showed minimal concession compared to prevailing secondary market levels, reflecting strong price resilience at the long end of the curve.

The auction is notable not only for its demand but also because it marks an uncommon instance of two ultra-long tenures being offered within a single week—an occurrence rarely seen on Malaysia’s bond auction calendar.

The next scheduled government bond auction is for a new issuance of 10-year Malaysian Government Securities (MGS) maturing in July 2035. Market expectations suggest an issuance size of MYR5 billion, with no additional private placement planned.

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