Malaysia could see outflows of almost US$8b if bonds downgraded by FTSE: Morgan Stanley

  • Economy
  • Wednesday, 17 Apr 2019

LONDON: Malaysia could see outflows of almost US$8bil if its bonds are downgraded by global index provider FTSE Russell, Morgan Stanley said in a research note.

FTSE said on Monday that it would review Malaysia's market accessibility level in its World Government Bond Index (WGBI) due to concerns about market liquidity.

Malaysia, currently assigned a '2' and included in the WGBI since 2004, was being considered for a potential downgrade to '1', making it ineligible for inclusion, FTSE said.

Foreign investors have been reducing their Malaysian government bond holdings since late 2016 and, as of late March 2019, held US$37bil, Morgan Stanley said.- Reuters