Foreign debt holdings hit 20-month high in December

PETALING JAYA: Foreign investors retained as net buyers of Malaysia’s debt securities for the second successive month in December 2019 as foreign debt holdings picked up RM8.1 billion to a 20-month high at RM204.7 billion.

Kenanga Research said the share to total Malaysia’s debt increased to 13.8%, the highest in 14 months.

It noted that 2019 saw the largest inflow (RM19.9 billion) in seven years, observed mostly in the second half of the year (2H19) as investors hunted for higher-yielding emerging markets securities following a slew of policy rate cuts by the central banks in the advanced economies and amid positive developments surrounding the US-China trade negotiations.

It said the inflow was driven by a net increase in holdings of Malaysian Government Securities (MGS), Malaysian Government Investment Issues (GII) and private debt securities (PDS). Holdings of MGS increased RM5.5 billion in December and foreign holdings share of total MGS edged up to 41.6%, a 19-month high.

GII increased RM2.7 billion and its foreign holdings share increased to 6.2%, a 20-month high. PDS increased RM600 million and its foreign holdings share was sustained at 1.8%.