Published on 22 May 2023.
The net foreign funds inflow slowed down in April to RM1.5 bil from RM6.6 bil in March. The reduction is attributed to the net outflow of MGS amounting to RM1.7 bil (March: RM4.4 bil inflow), a likely result of a lack of rollover options given two consecutive months of negative net MGS issuances (net issuance: -RM3.9 bil; net issuance in March: -RM9.9 bil).
Malaysia was not the only country in the region to experience sluggish foreign fund inflows. Indonesia and Thailand also recorded smaller foreign net purchases of government bonds in April worth USD0.3 bil (March: USD0.9 bil) and USD6.8 mil (March: 0.6 bil), respectively.
MGS bond yields registered a broad-based decline in April, with steeper falls seen for longer-tenure bonds. The 10-year MGS yield was down 18.1 bps at 3.74% as of end-April, before rising to 3.79% as of 19 May. Meanwhile, shorter-tenure UST bond yields rose in May, whereas yields of medium- to long-tenure bonds fell slightly. The benchmark 10-year UST bond yield decreased 4 bps to 3.44% as of end-April before rising to 3.70% as of 19 May. Following the larger decline in MGS yields relative to UST securities, the 10-year MGS-UST yield spread narrowed to 9.2 bps on the same date (end-April: 29.8 bps).
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 Credit Rating Agencies. 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 2023 by RAM Rating Services Berhad
All rights reserved. This material may not be published, reproduced, broadcast, rewritten or redistributed without prior permission.