Skip to content
  • Group
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • Careers
  • Services
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Newsfeed
    • Latest@MARC
  • Events & CSR
  • Contact Us
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
Menu
  • Group
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • Careers
  • Services
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Newsfeed
    • Latest@MARC
  • Events & CSR
  • Contact Us
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
  • Sign In
  • Subscribe
  • Group

    Group

    The MARC Group of Companies comprises MARC Ratings, MARC Solutions, MARC Data and MARC Learning.

    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning

    MARC Ratings

    • Rating Guide
    • Rating Process
    • Rating Symbols & Definitions
    • Rating Methodologies
    • Regulatory
    • Lead Managers

    MARC Solutions

    MARC Data

    MARC Learning

    • Careers
    • Careers
  • Services

    Services

    MARC's subsidiaries each provide distinct product offerings and services.

    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights

    Insights

    Find the vital information you need and stay up to date with the latest news from MARC.

    • Rating Announcements
    • Research & Analysis
    • Views
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Latest@MARC
    • MARC in the Media
    • Latest@MARC
  • Events & CSR

    Events & CSR

    MARC organises a diverse range of events throughout the year to engage with all stakeholders.

    • MARCares
    • Events
    • MARCares
    • Events
  • Contact Us

    Contact Us

    Let's get the conversation started - Get in touch with us!

    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
MARC Online
Subscribe
Menu
  • Group
  • Services
  • Insights
  • Events & CSR
  • Contact Us
Menu
  • Group
  • Services
  • Insights
  • Events & CSR
  • Contact Us
Credit Ratings & Related Assessments
Sustainability- Related Assessments
Economic & Fixed-Income Analysis
Subscriptions
Sustainability- Related Advisory
Debt Advisory
Analytics Consulting Services
Data Analytics
Credit Reporting
Learning Programme

Credit Ratings & Related Assessments

Sustainability- Related Assessments

Economic & Fixed-Income Analysis

Subscriptions

Sustainability- Related Advisory

Corporate & Debt Restructuring Advisory

Analytics Consulting Services

Data Analytics

Credit Reporting

Learning & Customised Programme

  • Insights
  • Latest@MARC
Corporate

Local bonds continue to attract foreign demand

View Reports

Contacts

Posted Date: September 22, 2020
 
In August, the local bond market saw net positive foreign inflows, albeit at a slower pace, for the fourth consecutive month. Foreign bond holdings rose by RM3.1 billion (July: RM8.3 billion) to RM209.0 billion, which is equivalent to 13.3% (Jul: 13.1%) of total outstanding bonds.

Local bonds remained attractive to foreign investors given, among other things, the central bank's accommodative monetary policies as well as Malaysia's negative inflationary environment. The ongoing bond purchasing programmes of global central banks had also helped support foreign demand.

Consumer prices, as indicated by the Consumer Price Index (CPI), have been falling y-o-y since March, though the momentum of the fall seems to have weakened. In July, the CPI came in at -1.3%, compared with -1.9% in June. The downward pressure on consumer prices will, however, likely persist at least over the short term given that Malaysia's Producer Price Index (PPI) has also been falling y-o-y since March. In July, PPI fell 3.5%, compared with a decline of 4.0% in the previous month.

There were net foreign inflows into Malaysian Government Securities (MGS), Malaysian Islamic Treasury Bills (MITB) and Islamic corporate sukuk on one hand, and net foreign outflows from corporate bonds, Malaysian Treasury Bills (MTB) and Government Investment Issues (GII) on the other hand. MGS contributed most of the inflows. Consequently, the total foreign holdings of MGS rose by RM3.2 billion (July: +RM7.7 billion) to RM167.8 billion, equivalent to 39.2% (July: 38.2%) of its total outstanding.

The bulk of foreign demand for MGS was mostly concentrated along the short-end of the curve. This was due to heightened expectations of an Overnight Policy Rate (OPR) cut by Bank Negara Malaysia (BNM) in September. However, amid signs of improvement on both the external and domestic economic fronts as business activities resume, BNM had left the OPR untouched at 1.75%.

Year-to-date, net foreign inflows amounted to RM4.3 billion (Jan-Aug 2019: +RM3.4 billion), the highest since 2016. Cumulative net foreign inflows into local bonds were highest in MGS (+RM3.9 billion), followed by MTB (+RM2.0 billion), MITB (+RM0.8 billion) and corporate sukuk (+RM0.6 billion). Meanwhile, there were cumulative net foreign outflows from corporate bonds (-RM1.3 billion), Bank Negara Malaysia Notes (-RM1.0 billion) and GIIs (-RM0.6 billion).

We see the record level of fiscal stimulus, unprecedented monetary easing and negative inflation to continue supporting foreign demand for local govvies in Malaysia going forward. On the supply side, we expect the increase in the government's debt ceiling to 60% of GDP to keep the supply of local govvies elevated over the next two years on pandemic-related stimulus spending.

Contacts:
Tan Jack Fong, +603-2717 2958/ jackfong@marc.com.my;
Quah Boon Huat, +603-2717 2931/ boonhuat@marc.com.my.

You May Also Like To Read

See All
Corporate

MARC honours high achievers of its 2021 Lead Managers' League Tables

23 September, 2022

Events

MARC to host economic discourse

6 December, 2022

Awards

MARC Ratings named Best Islamic Rating Agency at GIFA 2022

7 October, 2022

See All

Let’s get started.

Subscribe to our mailing list today

Subscribe Now
Group
  • About MARC
  • Leadership
  • Investor Relations
  • Notable Issuances
  • Careers
Regulatory
  • Rating Reviews Summary
  • List of Defaults
  • List of Credit Ratings Published
  • List of Entities on Rating Watch
Services
  • Credit Ratings & Related Assessments
  • Sustainability-Related Assessments
  • Economic & Fixed-Income Analysis
  • Sustainability-Related Advisory
  • Corporate & Debt Restructuring Advisory
  • Subscriptions
  • Analytics Consulting Services
  • Data Analytics
  • Credit Reporting
  • Learning & Customised Programmes
Subsidaries
  • MARC Ratings
  • MARC Learning
  • MARC Data
  • MARC Solutions
Insights
  • Rating Announcements
  • Research & Analysis
  • Views
  • Latest@MARC
  • MARC in the Media
Events
  • Corporate Events
  • Corporate Social Responsibility (CSR)
  • Advertise with MARC
Contact Us
  • Contact Us
  • Service Level Feedback Form
  • Publication Feedback Form
  • Whistleblowing
  • Group
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • Careers
  • Services
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Newsfeed
    • Latest@MARC
  • Events & CSR
  • Contact Us
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
Terms & Conditions
Privacy Notice
Copyright Notice
Whistleblowing
PDPA Notice
© 2023 Malaysian Rating Corporation Berhad. All rights reserved.
Facebook Twitter Linkedin

Join MARC Mailing List

I would like to subscribe this mailing list. Please tick whichever is applicable

I agree/ do not agree (please tick whichever is applicable) to receive future events, conferences or marketing materials from MARC. *

Privacy Notice *

Declaration *