Global and local bond yields spiked up in February

Published on 16 Mar 2021.

Share Tweet Email

February saw a spike in the long end of global yields. At the epicentre of this surge was the US Treasury market - the 10-year yield rose 33 bps m-o-m to 1.44% as at end-February, with the momentum continuing in early March. This represents the biggest m-o-m rise since November 2016. The yield spike was mainly triggered by rising inflation expectations due to the prospects of an earlier economic recovery amid swift global vaccinations.

Regional yields surged in tandem last month. The 10-year MGS yield rose 39.5 bps to 3.07% as at end-February, as did corresponding yields for Thailand and Indonesia that spiked a respective 43.0 and 34.1 bps m-o-m.

Despite the sharp spike in MGS yields, foreign appetite continued to strengthen in February, the tenth successive month of net foreign purchases. Net foreign inflow advanced to RM7.2 bil in February, from RM3.7 bil a month earlier. These were led by purchases of MGS and GII, which summed up to RM5.6 bil (January: RM3.1 bil). At the same time, demand for short-term government papers (MTB and MITB) also accelerated, with a net inflow of RM1.2 bil (January: RM0.4 bil). Looking ahead, uncertainties leading up to FTSE Russell’s announcement (expected on 29 March) on Malaysia’s status in the World Government Bond Index (WGBI) may curb foreign appetite in March.


Analytical contact
Woon Khai Jhek, CFA
(603) 3385 2512

Media contact
Padthma Subbiah
(603) 3385 2577


About RAM Rating Services Berhad (RAM Ratings)

Established in 1990, RAM Ratings is a leading credit rating agency registered under the Securities Commission’s Guidelines on Registration of Credit Rating Agencies, 2011. In addition to the provision of credit ratings for corporate bonds and sukuk and their issuers, RAM Ratings also provides research and publications on Islamic finance, fixed income and macro-economic and industry analysis as well as data analytics relating to credit risk, counterparty assessments and other related domains. 


ALL INFORMATION IS PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND. Although every reasonable care has been taken to ensure the accuracy, completeness and objectivity of the information contained in this Media Release, RAM Ratings makes no representation or warranty, whether express or implied, as to its accuracy, completeness and objectivity and accept no responsibility or liability relating to any losses or damages howsoever suffered by any person arising from any reliance on the views expressed or information in this Media Release. RAM Ratings assumes no obligation to update any information or statement contained herein, save for any information required to be disclosed by law.

Published by RAM Rating Services Berhad
© Copyright 2021 by RAM Rating Services Berhad
All rights reserved. This material may not be published, reproduced, broadcast, rewritten or redistributed without prior permission.

Publication Date Published Category
Bond Market Monthly - March 2021 16-Mar-2021 Bond Market Monthly View PDF