- Foreign holdings in MGS stable in October 2015. Foreign holdings of the Malaysian Government Securities (MGS) was relatively stable at RM153.9bil in October 2015, compared with RM153.8bil in September 2015. This follows three consecutive months of declines in the preceding months, and a recent peak of RM166.8bil in June 2015.

- Foreign holdings in MGS remained within the 46% range. In terms of percentage of total outstanding MGS, the foreign holdings level increased slightly to 46.3% in October 2015, from 45.6% in September 2015. The increase was due to a reduction in the base, with MGS outstanding declining 1.4% MoM to RM332.6bil in October 2015 from RM337.3bil in September 2015.

- 10-year MGS yield stable in recent weeks. The longer-term 10-year MGS yield was relatively stable in recent weeks, at 4.244% towards the third week of November 2015, compared with 4.10% in end-October 2015. The most recent high recorded before this was 4.386% as at end-August 2015. The 10-year MGS yield was at about 3.50% two years ago.

- Maintain NEUTRAL. Based on the latest industry overall data, foreign holdings in MGS continued to remain high. We maintain our stance of a likely less ample domestic liquidity situation ahead given the still historically high foreign holdings of MGS. Maintain NEUTRAL on the sector.

Source: AmeSecurities Research - 27 Nov 2015