Determinants of Bond Yield
Choy Veng Yieand1, Ng Hui Chen2
1Choy Veng Yieand, School of Accounting and Finance, Asia Pacific University of Technology & Innovation, Technology Park Malaysia, Kuala Lumpur.
2Ng Hui Chen, School of Accounting and Finance, Asia Pacific University of Technology & Innovation, Technology Park Malaysia, Kuala Lumpur.
Manuscript received on 05 February 2019 | Revised Manuscript received on 11 February 2019 | Manuscript Published on 19 February 2019 | PP: 238-244 | Volume-7 Issue-5S January 2019 | Retrieval Number: ES2150017519/19©BEIESP
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: In Malaysia, the fixed income market has outperformed the growth of equity market. Numerically, fixed income market has grew RM 0.42 trillion from year 2010 to RM 1.17 trillion in 2016 whereas the equity market has a growth of RM 0.39 trillion from RM 1.28 trillion to RM 1.67 trillion (Capital Market Malaysia, 2015). Notably, Malaysia’s fixed income market has even succeeded to become the third largest bond market in Asia in 2015. This paper is conducted in order to identify the determinants of Malaysian government bond yield. Few tests are employed, including the descriptive analysis, normality test, unit root test and the Autoregressive Distributed Lag (ARDL) model to test on data range from 2006(Q1) to 2016(Q4). The findings indicated that all the explanatory variables, namely exchange rate, foreign interest rate and GDP growth rate are significant in explaining the variation in Malaysian government bond yield except the current account balance to GDP ratio.
Keywords: Malaysian Government Bond Yield; Exchange Rate; Foreign Interest Rate; GDP, Current Account Balance To GDP Ratio.
Scope of the Article: e-governance, e-Commerce, e-business, e-Learning