Bond market sees net foreign inflow again in February despite MGS yield spike


KUALA LUMPUR: Foreign appetite for local bonds continued to strengthen in February, the 10th successive month of net foreign purchases, despite a sharp spike in Malaysian Government Securities (MGS) yields, said RAM Rating Services Bhd (RAM Ratings).

It said the 10-year MGS yield jumped 39.5 basis points (bps) to 3.07 per cent as at the end of February, as regional yields surged in tandem with the soaring 10-year US Treasury yield.

"Net foreign inflow (into the country) advanced to RM7.2 billion in February, from RM3.7 billion a month earlier, led by purchases of MGS and Government Investment Issues (GII), which summed up to RM5.6 billion (January: RM3.1 billion),” the rating agency said in a statement today.

At the same time, RAM Ratings said, demand for short-term government papers (Malaysian Treasury Bills and Malaysian Islamic Treasury Bills) also accelerated, with a net inflow of RM1.2 billion (January: RM0.4 billion).

"Looking ahead, uncertainties leading up to FTSE Russell’s announcement (expected on March 29) on Malaysia’s status in the World Government Bond Index may curb foreign appetite in March,” it said. - Bernama

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RAM Ratings , MGS , GII , WGBI , Bonds

   

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