Malaysia’s bond market sees strong foreign inflows of RM6.1b in March
KUALA LUMPUR, April 18 – Malaysia’s bond market experienced a notable rebound in March, with foreign investors returning in force and recording net inflows of RM6.1 billion.
According to RAM Ratings, the figure marks the strongest monthly inflow in 10 months and reverses the outflows seen in February.
Shift in investor sentiment
The inflows signal a turnaround in sentiment, with investors regaining interest in Malaysian fixed-income assets after a period of uncertainty.
Malaysian Government Securities (MGS) attracted the bulk of the funds, while corporate bonds also recorded healthy inflows.
Attraction despite global volatility
The recovery comes amid a challenging global backdrop, including geopolitical tensions and shifting expectations on US monetary policy.
Rising oil prices have also raised concerns over inflation, influencing global investment decisions.
Spillover from US markets
Movements in US Treasury yields have had a direct impact on regional markets, including Malaysia, as investors reassess risk and returns.
Market volatility has increased significantly, reflecting broader uncertainty.
Interest rate outlook shifts
Expectations for US rate cuts have faded, with markets now anticipating a prolonged period of higher interest rates.
This shift has been a key driver of global capital flows.
Local yields move higher
Malaysia’s 10-year bond yields rose in line with global trends, though they remain relatively competitive.
Outlook tied to external factors
Future performance of the bond market will depend largely on geopolitical developments, particularly those affecting energy prices and supply.
Early signs of easing pressure
Bond yields have moderated slightly in April, suggesting that market pressures may be beginning to stabilise.
-wilayah.com.my
