Fixed-Income Views

Malaysia’s latest exports in June fell by 14.1% (May: -0.9%), as exports to the US and EU slumped by double-digits of 19.0% and 21.8%. The weaker external sector performance in 2Q2023 reinforced our views of weaker domestic gross domestic product (GDP) growth for the quarter. A sustained trade moderation coupled with higher interest rates in …

Monthly Review: Monetary policies in transition could lead to bond market volatilities Read More »

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 …

Monthly Review: Monetary policy divergence exerts pressure on bond market Read More »

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 …

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

April saw a fourth straight month of net foreign inflows into the local bond market, albeit at a softer pace of RM1.5 billion compared to RM6.6 billion in March. Foreign investors continued to pour into local govvies (Apr: RM1.4 billion; Mar: RM7.9 billion), while net foreign flows in local corporate bonds turned positive at RM90 …

A buoyant bond market on conducive indicators Read More »

Net foreign flows into the local bond market extended for the third straight month in March. Rising to RM6.6 billion from February’s RM4.3 billion, there were higher flows into local govvies (Mar: RM7.9 billion; Feb: RM4.7 billion). Local corporate bonds, on the other hand, saw wider net foreign outflows (Mar: RM1.2 billion; Feb: -RM0.4 billion). …

Net foreign inflows continued for third straight month in March Read More »

February saw a second consecutive month of net foreign inflows into local govvies, which surged 840% to RM4.7 billion from January’s RM0.5 billion. Consequently, foreign holdings of MGS and GII increased by RM4.0 billion and RM1.0 billion (Jan: RM1.3 billion; RM1.4 billion). Despite February’s net foreign inflows into local govvies, foreign holdings inched lower to …

Extended foreign buying of bonds in February Read More »

In line with major government bonds, local govvies ended stronger in January. Of note, the 10y yield of Malaysian Government Securities (MGS) fell below 4.0% for the first time since August 2022. Optimism over the Malaysian economy’s prospects had improved following China’s reopening, further helping the situation. This was also supported by the easing consumer …

Foreigners net buyers of ringgit bonds in January Read More »

Local govvies extended gains in December, spurred by an earlier-than-anticipated reopening of China’s economy. On the local front, signs of abating cost-push pressures on inflation also bode well for bonds. Malaysian Government Securities (MGS) yields shed between 2 bps and 15 bps across all maturities. Worth noting is the sale of RM4.0 billion 3y Government …

Local govvies extended gains in December Read More »

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 …

Local govvies mostly rallied, ringgit ended higher in November Read More »

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) …

Negative foreign flows with Malaysia bond selloff Read More »