Foreign outflow from bond market persisted in April, albeit milder

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Consequently, the cumulative foreign fund flow year-to-date fell to RM379.6 million. theSun theSundaily bond business news

PETALING JAYA: The Malaysian bond market registered a net outflow of foreign funds for a second successive month in April, with net outflow amounting to RM2.2 billion, slower than the RM4.0 billion selloff seen in March.

“However, foreign investors remained interested in short term government securities - Malaysian Treasury Bills and Malaysian Islamic Treasury Bills - for the third consecutive month, recording RM905.6 million in net purchases,” said RAM Ratings in a statement today. In line with market expectations, the Fed delivered a 50 bps interest rate hike on May 4. The Fed also announced it would start paring down its balance sheet from June onwards to significantly reduce securities holdings accumulated under the aggressive bond purchase programme instituted amid the pandemic.

The uptrend generally persisted in first half of May, with yields of these securities climbing further to 2.93% and 4.43%, respectively, as of May 13.

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