KUALA LUMPUR: Foreign bond investors’ risk aversion is unlikely to abate in near term, RAM Ratings says, though there was a decline in net foreign outflow in May compared with April.
“The current global uncertainties are unlikely to be resolved in June as investors still face risks and potentially negative developments,” Kristina Fong, RAM’s head of research said in a statement on Friday.
She said Federal Reserve watchers are becoming increasingly more sensitised to expectations of a rate cut, on the back of its more dovish tone.
“On the other hand, the global markets are also eagerly anticipating more clarity on the fate of future trade, as President Donald Trump and President Xi Jinping are set to meet at the G20 summit in late June.
“These developments could lead to different portfolio allocation strategies for active investors. As such, the impact is rather uncertain at this point.
“Norway's decision to exclude emerging markets' fixed-income securities from its Government Pension Fund Global in June could also result in some staggered rationalisation by the sovereign wealth fund. All said, we are not likely to see the end of market volatility just yet,” she said.
“The current global uncertainties are unlikely to be resolved in June as investors still face risks and potentially negative developments,” Kristina Fong, RAM’s head of research said in a statement on Friday.