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Market Daily Report: Bursa Malaysia Gives Up Earlier Gains To End Mixed

KUALA LUMPUR, Nov 19 (Bernama) -- Bursa Malaysia gave up earlier gains to end mixed today, amid a higher regional market showing, as property, construction, and healthcare counters attracted buying interests, while plantation, banking, and telecommunication stocks saw some profit-taking, an analyst said. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 1.70 points to close at 1,602.34 from yesterday’s close of 1,604.04. The benchmark index, which opened 0.86 of-a-point lower at 1,603.18, moved between 1,601.02 and 1,608.88 during the trading session. However, the broader market was mixed to higher, with gainers leading decliners by 565 to 438 while 502 counters remained unchanged, 961 untraded, and 14 suspended. Turnover narrowed to 2.83 billion units valued at RM2.08 billion versus 2.96 billion units valued at RM2.23 billion yesterday. Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the benchmark index remained range-bound and it required a dec
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Global funds pile up nearly a trillion yuan of China bank bonds

Foreign investors ramped up holdings of short-term bonds issued by Chinese banks to a fresh record, as attractive rates for swapping dollars continued to juice the returns available on such debt.

Key Takeaways:

  • Record Holdings: Overseas institutions’ outstanding holdings of Chinese negotiable certificates of deposits (NCDs) reached 972.6 billion yuan ($133.7 billion) in June, according to Shanghai Clearing House data. This made up 22.5% of their overall China bond holdings in the month.
  • Shift in Investments: While global funds increased their holdings of NCDs, they cut their holdings of Chinese sovereign debt by 28.1 billion yuan in June, according to data from ChinaBond.
  • Attractive Returns: Low yuan borrowing costs in the onshore market and cheap foreign-exchange hedging costs have driven the interest in NCDs. Yields on one-year NCDs from Chinese banks with 'AAA' credit ratings have fallen to just under 2%, but overseas buyers get an expected yield of about 6% due to favorable currency swaps.
  • Investor Sentiment: Frances Cheung, the head of foreign-exchange and rates strategy at Oversea-Chinese Banking Corp (OCBC) in Singapore, noted that while the opportunity window remains open, heavy investor positions might slow additional flows going forward.

This significant increase in NCD holdings highlights the attractiveness of Chinese bank bonds to foreign investors, driven by favorable yields and currency swap rates.

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