Foreign buying returns to Malaysian bond market in June

Published on 21 Jul 2026.

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Foreign investors returned as net buyers of Malaysian bonds in June, recording a net inflow of RM4.9 bil after May’s RM4.3 bil outflow. Inflows were mainly directed into sovereign instruments, with Malaysian Government Securities (MGS) and Government Investment Issues attracting RM2.6 bil, while Malaysian Treasury Bills and Malaysian Islamic Treasury Bills saw a combined RM1.4 bil in net inflows. Corporate bonds extended their positive momentum, posting a fourth consecutive month of foreign purchases, although moderating to RM860 mil compared to RM2.5 bil in May.

Renewed foreign interest was supported by improved global risk sentiment amid signs of easing tensions in the Middle East and softer than expected US inflation data last month, which helped draw capital flows into regional fixed-income markets.

Despite the rebound, foreign flows may remain sensitive to external developments. Escalating geopolitical risks and expectations that US interest rates may stay higher for longer could temper demand for Malaysian bonds relative to US assets. Reflecting these expectations, the 10-year US Treasury yield stood at 4.60% as of 20 July, up from 4.44% at end-June, while the 10-year MGS yield rose to 3.69% from 3.64%. Consequently, the 10-year UST-MGS yield spread widened to 90.7 bps from 80.0 bps over the same period.

 

Analytical contact Woon Khai Jhek, CFA  (603) 2708 8286 khaijhek@ram.com.my		Media contact Sakinah Arifin (603) 2708 8212 sakinah@ram.com.my
Nur Rasyidah Abd Karim (603) 2708 8208 rasyidah@ram.com.my

 

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