PETALING JAYA: There is an increasing risk of higher capital outflows from Malaysia and emerging markets with the possible scaling back of bond purchases by the US Federal Reserve on the back of a stronger US economic recovery.
Malaysian Rating Corp Bhd (MARC) analysts said in the rating agency’s second-half Malaysia Bond Market Outlook that the narrowing spread between Malaysian Government Securities (MGS) and other sovereign bonds would likely start to cause investors to focus on sovereign bonds of developed countries.