• Foreign holdings of MYR debts securities increased to RM190.0bn

• Foreigners bought RM1.4bn of MGS and RM1.3bn of GII

• Total portfolio inflow of RM1.4bn for equities and debt securities combined

• Risk-on sentiment supported by the Fed’s dovish pivot

Foreign investors resumed the purchase of government debt papers to the tune of RM3.0bn in March. This lifted foreign ownership of government debt papers to 13.1%.

Foreign funds remained net buyers in March in-line with a positive tone observed in other regional market. Foreign investors bought more of Malaysia’s debt securities in March as total foreign holdings increased by RM3.0bn to RM190.0bn. Foreign flows went mainly to MGS as foreign holdings of MGS increased by RM1.4bn to RM150.7bn (Feb: RM149.3bn; Jan: RM144.4bn; Dec: 146.2bn). Foreign investors also increased their holdings of GII by RM1.3bn to RM18.7bn (Feb: RM17.4bn; Jan: RM16.6bn; Dec: RM15.9). These increased foreign holdings of Malaysian government bonds (MGS & GII) by RM2.7bn to RM169.4bn, or 23.7% of total bonds outstanding in March. For MGS alone, foreign investors held 38.7% of total MGS outstanding.

Foreign holdings of discount instruments edged up slightly by RM0.2bn to RM7.1bn as foreign investors bought Malaysian Treasury Bills (RM210m) and Malaysian Islamic Treasury Bills (RM50m). Foreign holdings of PDS also increased by RM0.1bn to RM13.5bn. As a result, in combined amounts (inclusive of short-term bills/notes and corporate bonds/sukuk), foreign holding levels in March 2019 were higher by RM3.0bn, bringing total foreign ownership of MYR bonds to RM190.0bn or 13.1% (Feb: 13.0%).

As at end-March, international investors bought RM3.0bn of Malaysian bonds (Feb: -4.5bn; Jan: -RM2.3bn) whilst the Malaysian equity market recorded total foreign net outflow of RM1.6bn (Feb: -RM0.82bn; Jan: +RM1.03bn). This means a total portfolio inflow of RM1.4bn for equities and debt securities combined. Meanwhile, in the corresponding period, Malaysia’s foreign international reserves increased by USD0.6bn to USD103.0bn (Feb: USD102.4bn; Jan: USD102.1bn).

Source: BIMB Securities Research - 8 Apr 2019