This will be helped by sta­ble macroe­co­nomic fun­da­men­tals

New Straits Times - - Business -


THE lo­cal mar­ket has the abil­ity to sup­port the sale of Malaysian sov­er­eign bonds by for­eign­ers, said AmBank Re­search. This will be helped by sta­ble macroe­co­nomic fun­da­men­tals, with the econ­omy poised to grow around 4.5 per cent this year and 4.8 per cent next year.

Still, AmBank Re­search ex­pects some up­ward pres­sure on the Malaysian sov­er­eign bond yields to re­main.

Based on its es­ti­mates, for ev­ery RM10 bil­lion drop in for­eign hold­ings of Malaysian Gov­ern­ment Securities (MGS), the 10year MGS yield is ex­pected to in­crease by six ba­sis points (bps), mean­ing the yields should have spiked sharply from the re­cent sell-down to around 37.6bps but rose to 34bps in­stead.

A record RM26.2 bil­lion in Malaysian sov­er­eign bonds were sold by for­eign­ers in March, it said. This low­ered their ex­po­sure to 38.5 per cent from 44.7 per cent in Fe­bru­ary and a peak of 51.9 per cent in Oc­to­ber last year. AmBank Re­search said global funds had with­drawn RM62.7 bil­lion from Malaysian sov­er­eign bonds from last Novem­ber till March.

“It is the long­est stretch of out­flows since 2014. It fol­lowed mea­sures in­tro­duced to ad­dress the off­shore non-de­liv­er­able for­ward mar­ket in a move to sta­bilise the volatil­ity, which were ef­fec­tive,” it added. With­drawal from sov­er­eign bonds from Nov-March

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