KUALA LUMPUR: Foreign fund outflow from the bond market persisted for the third consecutive month in October, albeit at a more moderate pace than in September, said RAM Rating Services Bhd (RAM Ratings).
The credit rating agency said the overall net outflow amounted to RM2.6 billion last month (September: RM4.4 billion), led by Malaysian Government Securities (MGS) and Government Investment Issues (GII) (RM1.8 billion) and Malaysian Treasury Bills (MTB) and Malaysian Islamic Treasury Bills (RM300 million).
"The selling pressure was largely attributed to the still hawkish US Federal Reserve and stronger than expected US economic growth.
"Negative sentiment, however, appears to have waned somewhat since late October as 10-year United States Treasury (UST) and MGS yields, respectively, retreated to 4.45 per cent and 3.86 per cent as of Nov 16," it said in a statement.
RAM also highlighted that the ringgit saw a marked appreciation to 4.66 against the US dollar on Nov 7 (end-October: 4.77) before retracing some gains to 4.71 on Nov 16.
"The still elevated macro risk and geopolitical uncertainty are expected to continue to weigh on investor sentiment, likely capping further gains in the near term," it added. - Bernama
