Foreign inflows into bonds seen to rise in 4Q

PETALING JAYA: Foreign investors’ purchase of Malaysian bonds in August is likely to be temporary due to the far more aggressive rate hikes by the US Federal Open Market Committee as compared with the overnight policy rate (OPR) raised by Bank Negara.

The local bond market is expected to see sustained net selling by foreign funds looking for higher yields on US-dollar bonds before turning net buyers possibly in the later part of the fourth quarter of 2022 (4Q22).