Malaysia’s GovernmentBond Market

Corporate Debt Securities

How to buy How to buy bonds?bonds?

Malaysia’s Government Bond Malaysia’s Government Bond MarketMarket

Government Debt

Securities at issue

After Issue and at

Maturity

Self-service Options

Government

Debt Secu

rities

at Issu

e

Choosing Type of Securities to BuyChoosing Type of Securities to Buy

Bank Negara Monetary Notes (BNMN)Bank Negara Monetary Notes (BNMN)Issued by Bank Negara Malaysia for managing liquidity in both the conventional Issued by Bank Negara Malaysia for managing liquidity in both the conventional and Islamic financial market. and Islamic financial market.

Malaysian Treasury Bills (MTB)Malaysian Treasury Bills (MTB)Unsecured Bills issued by Government on a discount basis.Unsecured Bills issued by Government on a discount basis.

Malaysian Government Securities (MGS)Malaysian Government Securities (MGS)Unsecured securities issued by Government that requires minimum 10% bid in Unsecured securities issued by Government that requires minimum 10% bid in multiple of MYR.multiple of MYR.

Government Investment Issues (GII)Government Investment Issues (GII)Unsecured Islamic bonds issued by Government based on Islamic principles Unsecured Islamic bonds issued by Government based on Islamic principles ( Bai’ Al-Inah)( Bai’ Al-Inah)

Sukuk Bank Negara Malaysia Issue (SBNMI)Sukuk Bank Negara Malaysia Issue (SBNMI)Zero coupon bonds that need a special purpose vehicle to facilitate primary Zero coupon bonds that need a special purpose vehicle to facilitate primary issuance.issuance.

Check the ConditionsCheck the Conditions

Check Tender DatesCheck Tender Dates

Bank Negara Malaysia will invite tenders before the issue date through Bank Negara Malaysia will invite tenders before the issue date through Fully Automated System for Tendering (FAST). Auction details are Fully Automated System for Tendering (FAST). Auction details are normally announced 2 weeks prior to auction date. All relevant normally announced 2 weeks prior to auction date. All relevant information is posted on FAST.information is posted on FAST.

Submission of BidsSubmission of Bids

All government debt securities are offered to Principal Dealers (PDs) All government debt securities are offered to Principal Dealers (PDs) via competitive auction. PDs are invited submit bids directly to FAST.via competitive auction. PDs are invited submit bids directly to FAST.

ProceduresProcedures

Interested investors place orders for Government securities through Bank Negara Malaysia-Interested investors place orders for Government securities through Bank Negara Malaysia-appointed Principal Dealers (PDs), who charge varying fees for their services. PDs normally appointed Principal Dealers (PDs), who charge varying fees for their services. PDs normally require investors to maintain a cash account and a securities account for settlement of bond require investors to maintain a cash account and a securities account for settlement of bond trades. Bids submitted must be in amounts that are multiples of MYR1 million. trades. Bids submitted must be in amounts that are multiples of MYR1 million.

For further information, investors may contact the PDs listed below: For further information, investors may contact the PDs listed below:

AmMerchant Bank BerhadAmMerchant Bank Berhad Bumiputra-Commerce Bank BerhadBumiputra-Commerce Bank Berhad Citibank BerhadCitibank Berhad Commerce International Merchant Bankers Berhad Commerce International Merchant Bankers Berhad Hong Leong Bank BerhadHong Leong Bank Berhad HSBC Bank Malaysia Berhad HSBC Bank Malaysia Berhad Malayan Banking BerhadMalayan Banking Berhad Public Bank Berhad Public Bank Berhad RHB Bank BerhadRHB Bank Berhad Standard Chartered Bank Malaysia Berhad Standard Chartered Bank Malaysia Berhad

ResultsResults

Award Mechanism/ConfirmationAward Mechanism/Confirmation

For competitive bidding, tenders are sorted in order of yield (lowest For competitive bidding, tenders are sorted in order of yield (lowest to highest) or price/100 (highest to lowest) and amount of bid. This orderto highest) or price/100 (highest to lowest) and amount of bid. This orderis used to allot securities to bidders until the issue is fully subscribed.is used to allot securities to bidders until the issue is fully subscribed.

SettlementSettlement

Tender results are interfaced with Malaysia’s Real-time Electronic Tender results are interfaced with Malaysia’s Real-time Electronic Transfer of Funds and Securities (RENTAS) for securities allotment Transfer of Funds and Securities (RENTAS) for securities allotment and funds transfer. On the issue date, Principal Dealers' securities and funds transfer. On the issue date, Principal Dealers' securities accounts are credited with the new bonds, while their cash accounts accounts are credited with the new bonds, while their cash accounts are debited for the price of the securities purchased. Principal Dealers are debited for the price of the securities purchased. Principal Dealers have various procedures for settlement with clients. Normally, they debit have various procedures for settlement with clients. Normally, they debit a client's deposit account while crediting the client’s securities account.a client's deposit account while crediting the client’s securities account.

After Issue and at

After Issue and at

MaturityMaturity

Buying and selling on the secondary Buying and selling on the secondary marketmarket

An investor can either hold a security until maturity or sell prior to maturity at An investor can either hold a security until maturity or sell prior to maturity at the current market price. Investors can also buy bonds already issued. the current market price. Investors can also buy bonds already issued.

Government securities are traded over-the-counter (OTC) in the secondary Government securities are traded over-the-counter (OTC) in the secondary market. Investors trade through bond dealers. Bond dealers are financial market. Investors trade through bond dealers. Bond dealers are financial institutions licensed by the Securities Commission to trade bonds for their own institutions licensed by the Securities Commission to trade bonds for their own or client accounts. or client accounts.

Investors place orders with dealers at the price and amount they want. Different Investors place orders with dealers at the price and amount they want. Different types of orders can be placed. Order fulfillment depends on whether the order types of orders can be placed. Order fulfillment depends on whether the order can find a buyer or seller on the OTC market. The standard market lot for can find a buyer or seller on the OTC market. The standard market lot for government securities is MYR 5 million. government securities is MYR 5 million.

Banks maintaining their own bond inventory usually provide their market bid or Banks maintaining their own bond inventory usually provide their market bid or offer price to clients. Quotes are price/100 or yield to maturity of the bond. offer price to clients. Quotes are price/100 or yield to maturity of the bond.

Payment of Interest and Payment of Interest and RedemptionRedemption

Payment of InterestPayment of Interest

Bondholders receive interest through their cash accounts with Authorized Bondholders receive interest through their cash accounts with Authorized Depository Institutions (ADIs). On interest payment dates, the paying agent uses Depository Institutions (ADIs). On interest payment dates, the paying agent uses the Real-time Electronic Transfer of Funds and Securities (RENTAS) system to the Real-time Electronic Transfer of Funds and Securities (RENTAS) system to credit the ADI of the security holder. The ADI then credits the cash account of the credit the ADI of the security holder. The ADI then credits the cash account of the securities holder. securities holder.

There is no ex-date trading under the RENTAS system. Interest payments are There is no ex-date trading under the RENTAS system. Interest payments are done at the end of T+1 (one day following the transaction due date). Calculation done at the end of T+1 (one day following the transaction due date). Calculation of interest, accrued interest, and redemption proceeds are available in Part IV of of interest, accrued interest, and redemption proceeds are available in Part IV of the Rules on the Scripless Securities under the RENTAS System, published by the Rules on the Scripless Securities under the RENTAS System, published by Bank Negara Malaysia. Bank Negara Malaysia.

Redemption Redemption

RENTAS handles the redemption process on the redemption date by debiting and RENTAS handles the redemption process on the redemption date by debiting and crediting the securities and cash accounts of the ADI of the security holder. The crediting the securities and cash accounts of the ADI of the security holder. The ADI then credits the cash account of the securities client.ADI then credits the cash account of the securities client.

Reopening IssuesReopening Issues

To increase liquidity, existing government issues are reopened. Reopenings To increase liquidity, existing government issues are reopened. Reopenings are the offering of new securities with the same terms and conditions as an are the offering of new securities with the same terms and conditions as an existing issue. They are used to increase the size of an outstanding issue. A existing issue. They are used to increase the size of an outstanding issue. A reopened bond has the same maturity date, security identifier, and coupon rate reopened bond has the same maturity date, security identifier, and coupon rate as the original security. The only difference is that they have a different issue as the original security. The only difference is that they have a different issue date and usually, a different purchase price based on current market yields. date and usually, a different purchase price based on current market yields.

Self-Service Options

Bond Calculator Brochures & formsInvestor Contact

Center

Bond CalculatorBond Calculator

Basic bond calculators illustrate the various relationships between price, yield, coupon Basic bond calculators illustrate the various relationships between price, yield, coupon rates, and maturity dates, utilizing the mathematical pricing conventions common in the rates, and maturity dates, utilizing the mathematical pricing conventions common in the market. market.

Users can input the details of a security, such as yield, coupon and maturity to derive Users can input the details of a security, such as yield, coupon and maturity to derive market price or they can input market price, coupon, and maturity date to derive yields. market price or they can input market price, coupon, and maturity date to derive yields.

Brochures & Forms

For government Debt Securities, there are no online forms investors can use to directly buy government bonds. For primary issues, forms, and other requirements, the Fully Automated System for Tendering ( FAST ) is used. The Malaysian Investor, a Securities Commission of Malaysia site for retail investors, provides helpful guidelines for investing in Malaysian capital markets and in bonds specifically.

Investor Contact Centers

Bank Negara Malaysia (BNM)BNM Ringgit Bond Market

Corporate Debt SecuritiesCorporate Debt Securities

Corporate Debt Securities at

Issues

After Issues and Maturity

Self-Service Options

Choosing the Corporate Choosing the Corporate Securities You Want to BuySecurities You Want to Buy

Cagamas InstrumentsCagamas Instruments issues by Cagamas Berhad and the instrument include Cagamas Notes, issues by Cagamas Berhad and the instrument include Cagamas Notes,

Cagamas Bonds, Sanadat Mudrabahah Cagamas and Sanadat Cagamas. Cagamas Bonds, Sanadat Mudrabahah Cagamas and Sanadat Cagamas. Commercial PapersCommercial Papers

issues by Malaysia Corporation and the instrument include Conventional issues by Malaysia Corporation and the instrument include Conventional Commercial Papers and Islamic Commercial Papers. Commercial Papers and Islamic Commercial Papers.

Medium Term NotesMedium Term Notes issues by Malaysia Corporation and the instrument include Conventional issues by Malaysia Corporation and the instrument include Conventional Medium Term Notes and Islamic Medium Term Notes. Medium Term Notes and Islamic Medium Term Notes.

Private Corporate BondsPrivate Corporate Bondsissues by Malaysia Corporation and the instrument include Conventional issues by Malaysia Corporation and the instrument include Conventional Private Debt Securities and Islamic Private Debt Securities.Private Debt Securities and Islamic Private Debt Securities.

Khazanah BondsKhazanah Bondsissues by Khazanah National Berhad, a Government holdings company, issues issues by Khazanah National Berhad, a Government holdings company, issues these unsecured zero coupon bonds under the Islamic principle of Murabahah these unsecured zero coupon bonds under the Islamic principle of Murabahah and the instrument is Khazanah Bonds.and the instrument is Khazanah Bonds.

Check the ConditionsCheck the Conditions Check Tender Dates of Notes/BondsCheck Tender Dates of Notes/Bonds

Cagamas bond auction details are usually announced at least one week prior Cagamas bond auction details are usually announced at least one week prior to auction by Cagamas Berhad. Forthcoming tenders for the other forms of to auction by Cagamas Berhad. Forthcoming tenders for the other forms of corporate and Islamic bonds are posted at least three business days before corporate and Islamic bonds are posted at least three business days before the tender date. the tender date.

Check Corporate Bond RatingsCheck Corporate Bond Ratings Local private debt securities, asset-backed securities, and Islamic debt Local private debt securities, asset-backed securities, and Islamic debt securities must be rated by either the Rating Agency Malaysia (RAM) or the securities must be rated by either the Rating Agency Malaysia (RAM) or the Malaysian Rating Corporation (MARC). Malaysian Rating Corporation (MARC).

Determine which Type of Bid to SubmitDetermine which Type of Bid to SubmitCagamas bonds are issued by tender, with Principal Dealers (PDs) required Cagamas bonds are issued by tender, with Principal Dealers (PDs) required to participate via competitive auction. Allotment is decided by highest bid. to participate via competitive auction. Allotment is decided by highest bid. Cagamas bonds are quoted on an annual yield basis. Investors apply to Cagamas bonds are quoted on an annual yield basis. Investors apply to dealers to bid on their behalf. dealers to bid on their behalf.

All types of corporate securities are issued by auction or through private All types of corporate securities are issued by auction or through private placement. Investors interested in buying new bond issues should contact placement. Investors interested in buying new bond issues should contact designated bond dealers for details on subscription procedures. designated bond dealers for details on subscription procedures.

Application ProcedureApplication Procedure Investors wishing to buy Cagamas Instruments place bond orders through Investors wishing to buy Cagamas Instruments place bond orders through

appointed Principal Dealers (PDs), which charge various fees for their appointed Principal Dealers (PDs), which charge various fees for their services. PDs normally require investors to maintain a cash account and a services. PDs normally require investors to maintain a cash account and a securities account for settlement of bond trades. Investors may contact The securities account for settlement of bond trades. Investors may contact The Primary Dealers for Cagamas Debt Securities.Primary Dealers for Cagamas Debt Securities.

For Commercial Papers, Medium Term Notes, and other corporate bonds, For Commercial Papers, Medium Term Notes, and other corporate bonds, investors may approach primary subscribers who will later apply fees for investors may approach primary subscribers who will later apply fees for underwriting services. underwriting services.

ResultsResults Award Mechanism/ConfirmationAward Mechanism/Confirmation

FAST generates general results accessible to the public, and individual FAST generates general results accessible to the public, and individual results for bidders. Allotments go initially to the PD accounts. results for bidders. Allotments go initially to the PD accounts. PDs then distribute client bids and advise customers of bid results. General PDs then distribute client bids and advise customers of bid results. General tender results are published by FAST and Bank Negara Malaysia (BNM). tender results are published by FAST and Bank Negara Malaysia (BNM). Tender results for Islamic bonds are also published by BNM. Tender results for Islamic bonds are also published by BNM.

Settlement Settlement

Principal Dealers or approved dealers have various procedures for settlement Principal Dealers or approved dealers have various procedures for settlement with clients. Normally, they debit a client’s deposit account while crediting with clients. Normally, they debit a client’s deposit account while crediting the client’s securities account. the client’s securities account.

Buying and Selling on the Secondary Market

Payment of Interest and Redemption

After Issue and At MaturityAfter Issue and At Maturity

Buying and Selling on the Secondary MarketBuying and Selling on the Secondary Market

An investor can either hold a security until maturity or sell prior to maturity at the An investor can either hold a security until maturity or sell prior to maturity at the current market price. Investors can also buy bonds already issued. current market price. Investors can also buy bonds already issued.

The corporate bond market in Malaysia is largely over-the-counter (OTC). Buying The corporate bond market in Malaysia is largely over-the-counter (OTC). Buying and selling conventional and Islamic bonds is done by telephone or other and selling conventional and Islamic bonds is done by telephone or other electronic means between bond dealers and investors. electronic means between bond dealers and investors.

Payment of Interest and RedemptionPayment of Interest and Redemption

Bondholders receive interest through their cash accounts with Authorized Bondholders receive interest through their cash accounts with Authorized Depository Institutions (ADIs). On interest payment dates, the paying agent uses Depository Institutions (ADIs). On interest payment dates, the paying agent uses the Real-time Electronic Transfer of Funds and Securities (RENTAS) system to the Real-time Electronic Transfer of Funds and Securities (RENTAS) system to credit the ADI, which then credits the cash account of the securities holder. credit the ADI, which then credits the cash account of the securities holder.

On the redemption date, RENTAS handles debits and credits the securities and On the redemption date, RENTAS handles debits and credits the securities and cash accounts of the ADI of the security holder. The ADI then credits the cash cash accounts of the ADI of the security holder. The ADI then credits the cash account of the securities client. account of the securities client.

Self-Service Options

Bond Calculator Research CenterInvestor Contact

Center

Bond CalculatorBond Calculator Basic bond calculators illustrate the various relationships between price, yield, Basic bond calculators illustrate the various relationships between price, yield, coupon rates, and maturity dates, utilizing the mathematical pricing conventions coupon rates, and maturity dates, utilizing the mathematical pricing conventions common in the market. common in the market.

Users can input the details of a security, such as yield, coupon and maturity to Users can input the details of a security, such as yield, coupon and maturity to derive market price or they can input market price, coupon, and maturity date to derive market price or they can input market price, coupon, and maturity date to derive yields. derive yields.

Research CenterResearch Center AsianBondsOnline is a one-stop clearing house of information on sovereign and AsianBondsOnline is a one-stop clearing house of information on sovereign and corporate bonds. It contains essential data on current market activities, the legal corporate bonds. It contains essential data on current market activities, the legal and regulatory framework, and government policies and initiatives affecting the and regulatory framework, and government policies and initiatives affecting the market. market.

Investors may also refer to FAST and the Ringgit Bond Market websites of BNM. Investors may also refer to FAST and the Ringgit Bond Market websites of BNM.

Bond Pricing Agencies (BPA) in Malaysia provides daily fair value prices of all Bond Pricing Agencies (BPA) in Malaysia provides daily fair value prices of all MYR-denominated bonds traded in the OTC market. Investors may refer to MYR-denominated bonds traded in the OTC market. Investors may refer to Bondweb.com, the first appointed BPA in Malaysia. Bondweb.com, the first appointed BPA in Malaysia.

Investor Contact CenterInvestor Contact Center Bursa Malaysia Marketing Communications Commerce International Bursa Malaysia Marketing Communications Commerce International

Bhd Bhd Bank Negara Malaysia ABN AMROBank Negara Malaysia ABN AMRO RHB Sakura Merchant Bankers Berhad AmMerchant Bank Bhd RHB Sakura Merchant Bankers Berhad AmMerchant Bank Bhd