Fixed-Income Views

Monthly Review: Monetary policy divergence exerts pressure on bond market

The latest retail and exports data suggest a slower domestic economy in the second quarter of 2023 is imminent given the anticipated slowdown in the global economy. Notably, the second straight month of moderation in the seasonally adjusted volume index of wholesale & retail trade (April: 4.7%, Mar: 9.4%) along with interest rate tightening and …

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Monthly Review: Easing inflation and potential peak in OPR to support bond market

The local bond market saw the fifth consecutive month of net foreign inflows at RM3.0 billion in May, higher than the RM1.5 billion recorded in the prior month. The solid foreign demand reflected the attractiveness of local bonds amid the anticipated moderation in inflation this year. Local govvies continued to attract foreign interest with net …

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Local govvies mostly rallied, ringgit ended higher in November

In November, foreign outflows from the local bond market extended for the third consecutive month, albeit at a slower pace (RM1.0 billion; October: RM6.3 billion). Consequently, cumulative foreign flows YTD fell deeper into negative territory to RM8.9 billion. It is important to note, though, that the outflow was mainly attributed to redemptions of short-term government …

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Negative foreign flows with Malaysia bond selloff

In September, heavy selling pressure amid the global bond rout pushed local government bond yields higher across all maturities. Global financial markets were rattled by stubbornly high inflation, which spurred market expectation of more aggressive monetary tightening ahead after being flagged by major central banks. Because of the selloff, yields of Malaysian Government Securities (MGS) …

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Accelerated foreign outflows from bond market due in part to weak ringgit

In October, foreign investors net sold RM6.3 billion worth of local bonds by trimming their holdings to RM248.7 billion or equivalent to 13.3% (September: 13.7%) of total outstanding bonds. It was the second consecutive month of net foreign selling, though considerably larger compared with September’s RM439.0 million. As a result, cumulative foreign flows YTD dipped …

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