KUALA LUMPUR: Foreign investors remained net buyers of Malaysian bonds, albeit at a tapered pace, for the 13th consecutive month in May 2021.
RAM Ratings said in a statement on Tuesday foreign investors' overall holdings rose by RM1.9bil to RM247.9bil (April: +RM6.4bil), the weakest foreign inflow since September 2020.
RAM’s economist, Nur Nadia Mazlan explained May’s smaller foreign inflow tracks the broader regional trend.
She said it might also be due to heightened risk aversion amid the resurgence in Covid-19 infections and the subsequent nationwide lockdown.
Foreign fund flows into the South Korean government bonds slowed from US$4.2bil to US$2.8 bil month-on-month while Indonesia reported US$500mil outflow in May (April: +US$900mil).
“Amid weaker investor sentiments, long-end domestic bond yields faced renewed upward pressure with the benchmark 10-year MGS yield rising 11.3 bps m-o-m to 3.25% in May 2021 (April 2021: -10.8 bps, ” RAM said.