KUALA LUMPUR: Foreign investors remained net purchasers of Malaysian Government Securities (MGS) and Government Investment Issues (GII) for the fourth straight month in February, generating an inflow of RM5 billion, almost double the RM2.7 billion in January.
RAM Rating Services Bhd said the overall fund inflow surged to RM4.3 billion in February compared with RM498.3 million in January despite continued outflows from Malaysian Treasury Bills (MTB) and Malaysian Islamic Treasury Bills (MITB) amounting to RM316 million.
"However, yields fell abruptly in March after market confidence was roiled by the sudden collapse of Silicon Valley Bank (SVB) and subsequent shutdown of Signature Bank in the United States (US),” it said in a statement today.
It said the 10-year US Treasury (UST) yield plunged to 3.39 per cent as of March 17, down 53 basis points (bps) from end-February, with the 10-year MGS initially following suit, falling 8.3 bps to 3.87 per cent as of March 14 from end-February but has since recovered to 3.96 per cent on March 17.
RAM Ratings said that in the short term, MGS yields might continue to trend relatively low, tracking the downward pressure on UST yields due to current sentiments and speculations about the US Federal Reserve’s next rate move.
"That said, there appears to be limited impact from the SVB collapse on domestic market confidence so far. Ringgit bonds should remain supported by healthy demand from local investors,” it added. - Bernama