• Foreign holdings of MYR debts securities declined to RM200.0bn

• Foreigners sold RM7.6bn of MGS and GII

• Total portfolio outflow of RM10.2bn for equities and debt securities combined

• Concerted global central banks’ efforts will continue to keep bond yields lower

Foreign portfolio flows posted the largest net outflows in 10 months at RM10.2bn in Feb (Jan: +RM3.4bn). This was mainly triggered by emergence of Covid-19 fears and recent political uncertainties.

Malaysian debt securities recorded a net outflow of RM8.2bn in February (Jan: +RM3.5bn), bringing YTD debt outflows to RM4.7bn in Jan-Feb (Jan-Feb 2019: +RM2.2bn). Looking into details, foreign selling was concentrated on Malaysian Government Securities (MGS) where RM7.1bn was sold (Jan: +RM.3bn; Dec: +RM5.5bn; Nov: +RM4.7bn). Government Investment Issues (GII) recorded the second largest outflows of RM0.5bn (Jan: -RM0.2bn; Dec: +RM2.7bn; Nov: +RM3.0bn). Percentage wise, foreign holdings of MGS decreased to 39.6% whilst foreign holdings of GII dropped to 5.8% of the outstanding. Correspondingly, foreign holdings of Malaysian government bonds (MGS & GII) declined by RM7.6bn to RM180.5bn (Jan: +RM3.1bn to RM188.1bn; Dec: +RM8.2bn to RM185.0bn; Nov: +RM7.7 to RM176.8bn), which is equivalent to 23.9% of total outstanding (Jan: 25.3%; Dec: 25.2%; Nov: 24.2%).

Foreign holdings of discount instruments decreased by RM0.4bn to RM6.6bn whilst foreign holdings of PDS declined by RM0.2bn to RM12.9bn. As a result, in combined amounts (inclusive of short-term bills/notes and corporate bonds/sukuk), foreign holding levels in February 2020 were lower by RM8.2bn, bringing total foreign ownership of MYR bonds to RM200.0bn or 13.1%.

Meanwhile, foreign investors continued to shy away from Malaysian equities for the eight-consecutive month, decreasing their holdings by RM2.0bn in February (Jan: - RM0.1bn), the largest monthly foreign net outflow since August 2019 which saw international funds taking out -RM2.6bn. This means a total portfolio outflow of RM10.2bn for equities and debt securities combined.

Source: BIMB Securities Research - 9 Mar 2020