KUALA LUMPUR: Yields for 10-year Malaysian government securities (MGS) jumped to 3.58% on March 19 from 2.84% at end-February, as fears of a global recession increase, prompting a flight to safe-haven assets.
In a statement, RAM Ratings said the move to safety so far this month follows heavy offloading by foreign investors in February, that was triggered by the unbridled spread of Covid-19 throughout the world and the political upheaval in the country.
“Looking ahead, the current spike in MGS yields is likely to be a knee-jerk reaction and yields are likely to retreat on account of further global monetary policy easing, including another potential rate cut by BNM in coming months,” it said.
The rating agency also noted that RM8.1 billiion in net outflow was seen in February.
In terms of supply, issuance of MGS/GII and corporate bonds remained robust, with RM12.0 billion and RM10.7 billion, respectively, in February.
source https://www.thesundaily.my/business/ram-bond-yields-spike-on-global-recession-fears-GE2161697
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