Higher bonds yields to extend into second half of year

PETALING JAYA: The Malaysian bond market, which saw about RM13bil of foreign outflows in May, could see continued selling by foreign funds extending into the second half of this year with yields for the 10-year Malaysian Government Securities (MGS) projected to hover between 4% and 4.5%.

Some bond analysts and economists told StarBiz they foresee continued selling pressure into the second half of the year due to further monetary tightening by major central banks, rising trade tensions between the US and its trading partners and the country’s RM1 trillion debt issue, causing yield spread between the 10-year MGS and 10-year US Treasuries to further narrow.