• Foreign holdings of MYR debts securities increased to RM210.1bn

• Foreigners bought RM2.8bn of MGS and GII in February

• Total portfolio inflow of RM2.74bn for equities and debt securities combined

• Steady OPR at 3.25% provides further support for bonds

Malaysian debt securities saw net foreign buying activities in March. Foreign holdings of MYR debt securities increased by RM2.8bn to RM210.1bn in March, equivalent to 15.6%.

Foreign holdings of both MGS and GII increased by RM0.4bn in March to RM165.9bn (Jan: RM165.5bn) and RM18.8bn (Jan: RM18.4bn) respectively. In percentage wise, foreign ownership of MGS increased to 45.6% (Feb: 45.4%; Jan: 45.7%; Dec’17: 45.1%; Nov: 44.3%) while holdings of GII remained at 6.7% (Feb: 6.7%; Jan: 6.9%; Dec: 6.9%; Nov: 6.7%). Although there was an inflow of RM0.8bn to RM184.7bn in foreign ownership of government debt (MGS + GII), percentage wise, total foreign holding in government debt decreased slightly to 28.6% from 28.7% in February due to an increased in total outstanding (Mar: RM645.7bn; Feb: RM640.8bn).

Meanwhile, foreign holdings of discount instruments increased by RM2.4bn to RM9.4bn while foreign holdings of PDS declined by RM0.4bn to RM15.9bn. In combined amounts (inclusive of short-term bills/notes and corporate bonds/sukuk), foreign holding levels in March 2018 were higher by RM2.8bn, bringing total foreign ownership of MYR bonds to RM210.1bn or 15.6%.

As at end-March, there were RM2.8bn inflows (Feb: -RM3.9bn; Jan: +RM4.4bn) from total debt securities while the equity market, saw relatively marginal foreign fund outflows of RM0.06bn in March (Feb: -RM1.1bn; Jan: +3.4bn) as a stronger ringgit provided buffer against global volatility. This means a total portfolio inflow of RM2.74bn for equities and debt securities combined (Feb: -RM5.0bn; Jan: +7.8bn).

Source: BIMB Securities Research - 10 Apr 2018