• Foreign holdings of MYR debts securities declined for third consecutive month

• Foreigners bought RM2.1bn of MGS

• RM3.2bn of GII was sold

• Total outflow of RM0.8bn for debt securities and RM0.2bn for equities

• UST gains and broadly weaker USD could increase foreign interest in ringgit bond market

Foreign holdings of total debt securities in August were lower by RM0.8bn at RM190.7bn from RM191.5bn. However, percentage wise the total debt securities was unchanged at 15.2%.

Foreign holdings of MGS in August increased by RM2.1bn to RM151.0bn from RM148.9bn in July. However, foreign ownership of GII dropped further as foreigners sold RM3.2bn to RM16.4bn. In percentage wise, foreign ownership of MGS increased to 40.3% (Jul: 40.1%; Jun: 41.2%; May: 41.8%; Apr: 39.7%) while holdings of GII fell to 6.3% (Jul: 7.4%; Jun: 7.8%; May: 7.8%; Apr: 7.9%). Given the outflow of RM1.1bn in government debt, total foreign holding in government debt (MGS + GII) amounted to 26.4% from 26.5% during the same period.

Meanwhile, foreign holdings of PDS increased by RM0.5bn to RM16.8bn but foreign holdings of discount instruments declined by RM0.2bn to RM6.6bn. In combined amounts (inclusive of short term bills/notes and corporate bonds/sukuk), foreign holding levels in August were lower by RM0.8bn, bringing total foreign ownership of MYR bonds to RM190.8bn or 15.2%.

As at end-August, there were RM0.8bn outflows from total debt securities while foreigners sold RM0.2bn of equities, this means a total portfolio outflow of RM1.0bn for equities and debt securities combined.

Source: BIMB Securities Research - 14 Sept 2017