LO­CAL BACK­ING FOR GOVT SE­CU­RI­TIES

Out­flow mostly by for­eign ‘non-sticky’ in­vestors, says RAM Rat­ing

New Straits Times - - Business -

KUALA LUMPUR

THE de­mand for gov­ern­ment se­cu­ri­ties is still gen­er­ally sup­ported by lo­cal in­sti­tu­tional in­vestors, as ev­i­denced by the trend last month, said RAM Rat­ing Ser­vices Bhd.

“As such, we may ex­pe­ri­ence a re­bal­anc­ing from for­eign to do­mes­tic own­er­ship this year,” said RAM in a state­ment yes­ter­day.

The rat­ing agency said for­eign in­vestor out­flow from the Malaysian bond mar­ket was par­tic­u­larly more pro­nounced last month, rep­re­sent­ing a mon­thon-month in­crease of 3.4 per cent com­pared with the start of the year when net for­eign out­flow mo­men­tum seemed to dis­si­pate.

“A closer look at the com­po­si­tion of in­vestors re­veals that most of the out­flow from Novem­ber on­wards was con­trib­uted by short-term ‘non-sticky’ in­vestors, such as banks and as­set man­age­ment com­pa­nies,” it said.

Tal­ly­ing with the ob­ser­va­tion, yields of shorter-tenured gov­ern­ment bonds (three-month to five-year pa­pers) ex­pe­ri­enced an up­ward move­ment last month, sig­nalling some sell­ing pres­sure among short-term “non-sticky” in­vestors prior to United States Fed­eral Re­serve’s first pol­icy rate rise for the year on March 15, it said.

It ex­pects two more in­creases for this year.

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