Ringgit Strength, Foreign Inflows Support Malaysia Bond Market Amid Global Uncertainties
KUALA LUMPUR, April 12 (Bernama) -- Malaysia’s bond market continued to demonstrate resilience amid global volatility, supported by a strengthening ringgit and sustained foreign inflows, according to CIMB Treasury and Markets Research.
In the note today, the research firm said the MYR sovereign bond curve “twist-steepened week-on-week,” with foreign exchange (FX)-driven flows supporting the front end, as United States (US) dollar against the Malaysian ringgit (USD/MYR) fell below the 4.00 level and remained within the 3.96–3.99 range despite lingering uncertainties over the US–Iran ceasefire.
CIMB said attention will shift to the new 3-year Government Investment Issues (GII) 10/29 auction scheduled for April 14.
It said banking demand underpinned the belly and long end, while the ultra-long end cheapened as investors demanded higher risk premia in anticipation of heavier duration supply in the second quarter of 2026 (2Q 2026).
“Activity was muted at the start of the week, reflecting the Easter Monday holiday and cautious positioning ahead of the 30-year MGS 07/55 reopening on Tuesday and geopolitical developments.
“The 30-year yield rose by 5.5 basis points on Monday, in line with a higher when-issued yield, indicating a concession to attract demand for long-duration bond supply,” it added.
CIMB said the auction eventually recorded a decent bid-to-cover ratio of 2.03 times, supported by late demand, and cleared at an average yield of 4.197 per cent (range: 4.18–4.209 per cent).
Following the auction, buying interest led yields to retrace to 4.17 per cent, down one basis point on the day.
Meanwhile, the research firm said that non-resident (NR) holdings of MYR sovereign bills and bonds rose by RM3.3 billion month-on-month in March and RM4.2 billion quarter-on-quarter in the first quarter of 2026, with a notable rotation from GII into Malaysian Government Securities (MGS).
“As a result, NR shareholding increased to a three-month high of 21.5 per cent.
“The solid increase in March -- against NR outflows in Indonesia and Thailand -- was supported by the country’s relatively resilient macroeconomic fundamentals, as Malaysia is a net oil and gas exporter,” it added.
-- BERNAMA