RAM Ratings: Malaysian Bond Outflows Stabilising

KUALA LUMPUR, Feb 17 (Bernama) -- The pace of foreign investment outflow in Malaysia in the form of bonds slowed to 1.8 per cent in January, compared to a 2.4 per cent net outflow in December 2016. RAM Ratings said foreign holdings of Malaysian Government Securities (MGS) still made up a significant 46 per cent of total holdings (December 2016: 47.1 per cent). "In addition, fundamental demand for long-term investment appeared intact," it said in a statement Friday. The rating agency said after an eventful month for global public policy in January, risk sentiment is now at a high. "From the Trump administration's eagerness to follow through on several new foreign policies to the rise of nationalism in Europe, uncertainty is still the flavour of the month and likely to remain so in the foreseeable future," it said. As a result of the moderating pace of foreign funds outflow for Malaysia, RAM Ratings said yields normalised, with a downward yield to maturity shift in all asset classes. RAM Ratings said gross issuance of government securities summed up to US$3.14 billion (RM14 billion) in January (December 2016: US$448.68 million). "The strong issuance coincided with the government's increased financing requirements this year. On the other hand, gross issuance of corporate papers paled, with a total issuance value of only RM1.6 billion," it added. --BERNAMA