CDS rate higher but capped but investors unlikely to trim bond holdings

Fong: ‘Foreign participation in the MGS market has remained resilient.’

PETALING JAYA: The cost of insuring Malaysian bonds through credit default swaps (CDS) has increased from a year ago but is unlikely to reach the 200 mark last seen in 2011, according to analysts and economists.

As such, the current high cost of insuring Malaysian bonds that are denominated in foreign currency, especially in US dollars, would unlikely see investors trimming their bond holdings and any spike upwards in CDS rates would only be a knee-jerk reaction to uncertainties, they added.