• Foreign holdings of MYR debts securities increased to RM204.0bn

• Foreigners bought RM7.1bn of MGS and sold RM1.9bn of GII

• Total portfolio inflow of RM6.68bn for equities and debt securities combined

• Expect a cautious stance going into the final month

Gain in the ringgit saw foreign investors raised the ownership of Malaysian debt securities by 3.4% to RM240.0bn in November from RM197.3bn in October. The increase in foreign holdings in November was aided by the improved demand, particularly on short-dated papers in conjunction with ringgit’s strength.

Foreign holdings of MGS in November increased by RM7.1bn to RM160.3bn from RM153.2bn. However, foreign ownership of GII declined as foreigners sold RM1.9bn to RM17.9bn from RM19.8bn. In percentage wise, foreign ownership of MGS increased to 44.3% (Oct: 42.7%; Sep: 42.8%; Aug: 40.3%; Jul: 40.1%; Jun: 41.2%; May: 41.8%; Apr: 39.7%) while holdings of GII dropped to 6.7% (Oct: 7.4%; Sep: 7.0%; Aug: 6.3%; Jul: 7.4%; Jun: 7.8%; May: 7.8%; Apr: 7.9%). Given the inflow of 3.0% or RM5.2bn to RM178.2bn in foreign ownership of government debt (MGS + GII), total foreign holding in government debt increased to 28.4% in November as compared to 27.6% in October.

Meanwhile, foreign holdings of discount instruments increased by RM1.4bn to RM9.4bn while foreign holdings of PDS also increased slightly by RM0.1bn to RM16.4bn. In combined amounts (inclusive of short-term bills/notes and corporate bonds/sukuk), foreign holding levels in September were higher by RM6.7bn, bringing total foreign ownership of MYR bonds to RM204.0bn or 15.9%.

As at end-November, there were RM6.7bn inflows from total debt securities while foreigners sold RM0.02bn of equities, this means a total portfolio inflow of RM6.68bn for equities and debt securities combined.

Source: BIMB Securities Research - 12 Dec 2017