• Foreign holdings of MYR debts securities decreased slightly to RM197.3bn

• Foreigners sold RM3.5bn of MGS and bought RM1.3bn of GII

• Total portfolio outflow of RM3.0bn for equities and debt securities combined

• MYR bonds should see support with stabilizing UST

Foreign net buying interest relatively muted in October following the selloff triggered by spike in UST yields late October. Foreign ownership of Malaysian debt securities declined RM2.8bn in October to RM197.3bn.

Foreign holdings of MGS in October decreased by RM3.5bn to RM153.2bn from RM156.7bn. However, foreign ownership of GII increased as foreigners bought RM1.3bn to RM19.8bn. In percentage wise, foreign ownership of MGS declined slightly to 42.7% (Sep: 42.8%; Aug: 40.3%; Jul: 40.1%; Jun: 41.2%; May: 41.8%; Apr: 39.7%) while holdings of GII increased to 7.4% (Sep: 7.0%; Aug: 6.3%; Jul: 7.4%; Jun: 7.8%; May: 7.8%; Apr: 7.9%). Given the outflow of RM2.2bn in government debt, total foreign holding in government debt (MGS + GII) declined marginally to 27.6% in October from 27.8%.

Meanwhile, foreign holdings of PDS also dropped slightly by RM0.6bn to RM16.3bn while foreign holdings of discount instruments remained unchanged at RM8.0bn. In combined amounts (inclusive of short-term bills/notes and corporate bonds/sukuk), foreign holding levels in September were lower by RM2.8bn, bringing total foreign ownership of MYR bonds to RM197.3bn or 15.5%.

As at end-October, there were RM2.8bn outflows from total debt securities while foreigners sold RM0.2bn of equities, this means a total portfolio outflow of RM3.0bn for equities and debt securities combined. Despite the foreign selloffs, on a cumulative basis (as at end-Oct), foreigners remained net buyers of RM9.7bn worth of Malaysian equities but net sellers of RM7.4bn worth of debt securities.

Source: BIMB Securities Research - 7 Nov 2017