PETALING JAYA: 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 RM5bil.
This was almost double the RM2.7bil in January.
RAM Rating Services Bhd said the overall fund inflow surged to RM4.3bil in February compared with RM498.3mil in January despite continued outflows from Malaysian Treasury Bills and Malaysian Islamic Treasury Bills amounting to RM316mil.
“However, yields fell abruptly in March after market confidence was roiled by the sudden collapse of Silicon Valley Bank (SVB) and the subsequent shutdown of Signature Bank in the United States,” it said in a statement yesterday.
It said the 10-year US Treasury (UST) yield plunged to 3.39% 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% as of March 14 from end-February, but has since recovered to 3.96% 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 the current sentiment and speculation about the 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
