‘MALAYSIA’S BOND MARKET ATTRACTIVE TO INVESTORS’

Country benefits from positive commodity exports, says Aberdeen Asset Management

THE Malaysian bond market is one of the most attractive among emerging economies, driven by robust fundamentals, current account surplus and rising commodity prices, said a global investment management group.

Aberdeen Asset Management Asia Ltd Asian sovereign debt head Kenneth Akintewe said unlike the majority of emerging markets which are negatively impacted by the increase in commodity prices, Malaysia has benefited from the situation due the its positive commodity exports.

“It is actually providing some degree of positive stimulus and support to the underlying market valuations,” he said on the sidelines of the Investment Conference 2018, here, yesterday.

He said the Malaysian bond market has also become cheap due to corrections to previous events, such as such restriction on non-deliverable forwards and the surprise 14th General Election results.

He said the country’s bond market is also very stable compared with other emerging markets and has low exposure to United States Treasury yields.

On Malaysia’s debt, he said the government’s effort on fiscal consolidation and managing the debt should not just focus on absolute debt level but also on the composition of debt, such as shortterm and external debts.

“Malaysia, as well as many Asian economies, has a very good debt maturity profile, relatively low external debt, good coverage of short-term debt and a very high level of foreign exchange reserves.”

Akintewe said over the long term, the robust economic growth in the region is expected to increase the ability of governments and policymakers to bring down the debt level.

Themed “Diversification: Redefining Perspectives”, the halfday conference discussed opportunities in the current climate across a suite of asset classes.