KUALA LUMPUR, Nov 5 (Bernama) -- Bursa Malaysia closed higher, buoyed by Bank Negara Malaysia’s (BNM) decision to maintain the Overnight Policy Rate (OPR) at 2.75 per cent, alongside positive cues from Wall Street. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 19.30 points, or 1.19 per cent, to 1,635.86 from Wednesday’s close of 1,616.56. The benchmark index opened 6.72 points higher at 1,623.28, and fluctuated between an intraday high of 1,642.44 and a low of 1,622.62 during the trading session. However, market breadth was negative, with losers outnumbering gainers 723 to 497, while 466 counters were unchanged, 1,075 untraded and 10 suspended. Turnover rose to 3.74 billion units valued at RM3.61 billion compared with yesterday’s 2.81 billion units valued at RM2.57 billion.
On Tuesday, companies worldwide rushed into debt markets to issue bonds and loans, raising a staggering $43 billion in the US market alone, led by blue-chip firms like Ford Motor Credit Co., Formula 1, Petrobras, and Saudi Arabia’s sovereign wealth fund. This marks the busiest single sales day in recent years, as issuers look to capitalize on favorable borrowing costs ahead of potential rate hikes and market volatility due to the upcoming US presidential election.
Record Bond Sales Amid Low Yields: Nearly 30 blue-chip companies issued around $43 billion of bonds in the US market, while 24 companies and government-linked issuers raised €22.60 billion in Europe. Asian borrowers, including the Indonesian government, also joined the issuance spree. Investment-grade corporate debt yields averaged 4.52%, near their lowest in two years, prompting issuers to lock in low rates.
Preemptive Borrowing Ahead of Potential Volatility: Despite expectations that the Federal Reserve (Fed) might cut rates, companies are moving quickly to secure financing due to uncertainties about the pace of rate cuts and possible market volatility surrounding the US elections. Many firms, including Ford, Target, and General Motors Financial Co., tapped the bond market, while Uber Technologies explored its first investment-grade bond sale.
Speculative-Grade and High-Yield Activity Surges: Over $17 billion worth of deals were launched in the high-yield bond and leveraged loan markets, exceeding post-Labor Day activity from last year. Formula 1 and Instructure Holdings Co. initiated substantial leveraged loan sales for acquisitions, while TransDigm Group Inc. offered $3 billion of new debt to fund a special dividend.
This surge in global bond issuance reflects a strategic move by corporate finance chiefs to take advantage of current low borrowing costs and mitigate potential future risks tied to monetary policy and political uncertainties.
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