Forbes – The spread between Malaysia’s 5-yr IRS and 5-yr government bond yields hit a negative 9.5 bps on Thursday, as hedge funds and other speculators aggressively received 5-year swaps.

The spread was a positive 9.5 bps on Aug 5. The five-year ringgit swaps is quoted at 3.67 percent. Onshore and offshore players have generated huge demand for 5-yr swaps and bonds to avoid shorter-dated debt on a view that the central bank rate would remain on hold for the rest of the year. They are also looking to avoid 10-yr debt on concerns of more supply due to an expected bigger fiscal deficit.

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government bond, hedge funds, onshore, speculators