Foreign holdings of Malaysian bonds reached RM279.1 billion in July - MIDF Amanah

Foreign holdings of Malaysian bonds reached RM279.1 billion in July - MIDF Amanah

Foreign holdings of Malaysian bonds increased to RM279.1 billion in July 2024 from RM271.3 billion in June 2024, the highest amount since November 2023, according to MIDF Amanah Investment Bank Bhd. - Decorative pictures

09/08/2024

Foreign holdings of Malaysian bonds reached RM279.1 billion in July - MIDF Amanah

Foreign holdings of Malaysian bonds increased to RM279.1 billion in July 2024 from RM271.3 billion in June 2024, the highest amount since November 2023, according to MIDF Amanah Investment Bank Bhd. - Decorative pictures

KUALA LUMPUR: Foreign holdings of Malaysian bonds increased to RM279.1 billion in July 2024 from RM271.3 billion in June 2024, becoming the highest amount in the period since November 2023, according to MIDF Amanah Investment Bank Bhd.

Through its weekly fixed income review, the investment bank explained that the increase of RM7.8 billion marked the most significant monthly increase in a year, making cumulative foreign inflows into the Malaysian bond market for the seven-month period this year at RM8.7 billion.

"Foreign holdings jumped to 22.1 percent or RM265.4 billion in July 2024 of the total accumulated government bonds. This is the highest in seven months but remains below pre-pandemic levels (2019 average: 23.1 percent)," he added.

MIDF Amanah informed that the 10-year Malaysian Government Securities (MGS) yield, which is the benchmark, decreased by 15 basis points to 3.72 percent in July 2024 from 3.87 percent in June 2024.

In general, the 10-year MGS yield trend showed a decline throughout July, with a monthly high of 3.88 percent recorded earlier in the month.

"We maintain our 10-year MGS target at 3.68 percent for now. We acknowledge the 10-year yield may end the year underperforming compared to our year-end target due to faster foreign inflows into the domestic bond market.

"Therefore, we may revise our year-end target soon if macroeconomic indicators signal continued strong upside for the bond market," the investment bank explained.

Meanwhile, MGS new issues and Malaysian Government Investment Issues (MGII) remained stable at RM15.0 billion for July 2024, with three auctions totaling RM13.0 billion.

The average bid-to-issue ratio was good at 2.49 times, up from 2.40 times in June 2024, and private issuance amounted to RM2.0 billion.

"Net issuance increased again to RM4.0 billion after contracting by RM6.5 billion in June. As of July, outstanding government bonds remained at around RM1.20 trillion," he explained. - BERNAMA