FILE - In this June 19, 2013 file photo, Federal Reserve Chairman Ben Bernanke speaks during a news conference in Washington. A majority of the more than two dozen economists polled in an Associated Press survey late last week agree with the Fed's plan to start slowing its bond purchases later this year if the U.S. economy continues to strengthen. Higher long-term rates will likely result. (AP Photo/Susan Walsh, File)
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.
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