KUALA LUMPUR, Sept 7 — Foreign inflows into Malaysian government bonds totalled RM11.1 billion in August, according to Kenanga Investment Bank Bhd (Kenanga IB).
“Foreign investors turned net buyers of Malaysian government bonds, with RM11.1 billion of inflows in August and RM5.6 billion of that in the final week,” it said in its Bond Market Weekly Outlook today.
Kenanga IB said Malaysian Government Securities (MGS) and Government Investment Issues (GII) yields rose across the curve by between 1.3 basis points (bps) and 11.1 bps.
The 10-year MGS yield rose 11.1 bps to 3.985 per cent, while the 10-year GII yield increased 10.1 bps to 3.953 per cent, with the sell-off concentrated in the seven- to 10-year segment, it said.
“External rates led the move. Cautious remarks from US Federal Reserve chair Kevin Warsh at the Jackson Hole symposium tempered expectations for near-term Fed rate cuts, while escalating United States-Iran tensions lifted front-end US Treasury securities yields and oil prices,” it said.
Kenanga IB said domestic factors played a smaller role, with Malaysia’s manufacturing Purchasing Managers’ Index easing to 50.2 in August from 50.7 in July, while Bank Negara Malaysia kept the overnight policy rate unchanged for a seventh consecutive Monetary Policy Committee meeting.
“The local market closed before Friday’s US payrolls release, so the MGS curve has yet to price in the beat,” it said.
