Aggressive US rate hikes dampen appeal of emerging market bonds

Published on 18 Oct 2022.

Share Tweet Email

Foreign demand for MGS and GII waned in September (net outflows: RM2.5 billion) amid the continued hawkish stance of the US Federal Reserve in raising rates. Year to date, the Fed has raised rates by a total of 300 basis points. The 10-year UST yield jumped 68.0 bps m-o-m to 3.83% as at end-September, outpacing the 10-year MGS yield which rose 45.7 bps to 4.44% as at the same date. Consequently, this has narrowed the differential between MGS and UST yields, reducing the appeal of ringgit bonds for foreign buyers. The rate differential persisted in October, where the UST yields continued to outpace the increase in the MGS yields.


Analytical contact
Woon Khai Jhek, CFA
(603) 3385 2512
                     Media contact
Tho Li Ming
(603) 3385 2511


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 accepts 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 2022 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 This material may not be published, reproduced, broadcast, rewritten or redistributed without prior permission.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 - October 2022 18-Oct-2022 Bond Market Monthly View PDF