Domestic Bonds

RAM: April overseas bond purchases amount to RM6.4 billion

KUALA LUMPUR: Foreigners continued to buy Malaysian bonds in April, over 90% of which went to government bonds – Malaysian Government Securities (MGS) and Malaysian Government Investment Issues (MGII).

RAM Rating Services said net foreign purchases of Malaysian bonds in April amounted to RM 6.4 billion from RM 5.9 billion in March.

“This extends the current streak of overseas purchases to 12 months for a total of RM60.2 billion,” he said in a statement Friday.

The rating agency said more than 90% of that total purchase went to government bonds (i.e. MGS and GII), mostly backed by “sticky” investors (i.e. – say central banks, governments, pension funds and insurers).

RAM pointed out that amid constant foreign appetite and declining selling pressure, domestic bond yields fell in April.

As a result, the benchmark 10-year AMS yield fell 10.8bp to 3.14%, the first monthly decline in three months.

“The reprieve from the global liquidation also halted the rise in US Treasury bond (UST) yields last month; the 10-year UST yield fell 9bp (March: +30bp).

“Regional markets have also followed suit, with 10-year government bond yields in Singapore, Thailand and Indonesia down 15.0, 13.4 and 23.9 bps respectively over the same period.” RAM said.