Malaysia Bond Flows - 10 October 2023

September records a second outflow in 2023, driven by declining investors' risk appetite

Foreign investors were net sellers of Malaysia’s debt securities for the second consecutive month in September (-RM4.4b; Aug: -RM5.0b), mainly due to a sharp sell-off in short-dated securities

  • Consequently, the share of total foreign holdings of Malaysia’s debt was reduced to 13.7% after it rallied to a 15-month high last month (14.0%).
  • Foreign demand remains hampered by a declining risk appetite driven by rising global economic uncertainty. Additionally, domestic bonds have become less appealing due to the negative widening of MY-US 10year government bond yield spread (average yield spread Sep: -45.0 basis points (bps); Aug: -31.0 bps).

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