PETALING JAYA: The month of May saw foreign investors returning to become net buyers of local bonds. Net foreign inflows came in at RM1.5bil, compared with RM2bil in April.
As a result, total foreign holdings rose to RM187.3bil (12.2% of the total outstanding), from RM185.8bil (12.1%) previously.
Malaysian government securities (MGS) saw the largest foreign inflows, with the flows largely concentrated in tenures at the front-end of the yield curve. As of end-May, foreign holdings of MGS stood at RM150.5bil up 1.3% from April’s RM148.6bil.
Malaysian Rating Corp Bhd (MARC) said the net foreign inflow into the local bond market in May suggests that Malaysia continues to remain on investors’ radar.
“Bank Negara’s monetary easing thus far and expectations of further easing down the road were no doubt part of the reason. On top of that, government debt is largely denominated in domestic currency, with that denominated in foreign currencies making up only around 3% of the total, ” said MARC.