Malaysian bonds are facing increased vulnerability to outflows as local yields rise alongside US Treasuries , following Donald Trump’s election win. Analysts suggest this trend could continue, particularly given the sharp ringgit depreciation against a strengthening dollar. Malaysian bonds saw net outflows of RM11.2 billion (US$2.6 billion) last month — the largest since March 2020 — according to Bank Negara Malaysia (BNM) data. This outflow, coupled with a sell-off in US Treasuries and a weakening ringgit, is pressuring yields higher. Notably, the 90-day correlation between Malaysian bonds and the ringgit has risen to 0.63, signaling that as the ringgit weakens, bond yields tend to rise. “The election outcome suggests continued dollar strength ,” said Philip McNicholas, Asia sovereign strategist at Robeco Group in Singapore. “With Treasury yields steepening, there’s a risk of further foreign withdrawal from emerging-market (EM) assets , especially Malaysia’s lower-yielding bonds.”
KUALA LUMPUR, Oct 29 (Bernama) -- Bursa Malaysia finished higher today on bargain hunting, after six days of losses, as investors sought opportunities in large-cap stocks with compelling valuations following the recent global equity sell-off.
At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.61 points, or 0.29 per cent, to 1,615.08 from yesterday's close of 1,610.47.
The benchmark index opened 1.90 points firmer at 1,612.37 and moved between 1,609.70 and 1,619.05 during the session.
Sentiment in the broader market was tepid, with decliners slightly beating gainers 497 to 490 while 511 counters were unchanged, 982 untraded, and 123 suspended.
Turnover improved to 2.48 billion units valued at RM2.26 billion versus 2.45 billion units valued at RM2.21 billion yesterday.
UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan said despite the positive performance of today’s market, sentiment remains cautious, given the approaching third-quarter earnings season for local stocks and ongoing net foreign outflows.
“Investors are also awaiting quarterly results from major technology firms, including Apple, Microsoft, Google, Amazon, and Meta Platforms. Should these results meet market expectations, they could provide a timely boost to sentiment, potentially lending further stability to the local market,” he told Bernama.
In terms of economic indicators, Mohd Sedek said that investors will closely monitor the US Core Personal Consumption Expenditures index, US employment data, and China’s manufacturing Purchasing Managers’ Index this week.
Rakuten Trade Sdn Bhd’s equity research vice-president Thong Pak Leng said the FBM KLCI rebounded today on bargain hunting, particularly in energy, telecommunications, plantation and banking stocks.
“The key regional indices also moved higher with buying mainly in tech stocks following a positive cue from Wall Street overnight. Additionally, there are hopes that geopolitical tensions in the Middle East will not worsen,” he said.
Thong noted that while Malaysian equities are experiencing short-term downward pressure, strong economic fundamentals, continuous foreign direct investment, improving economic indicators, and attractive valuations are expected to attract bargain hunters in the future.
“While market sentiment has shown some improvement, we are cautious and acknowledge varying investor expectations. Hence, we expect the benchmark index to remain in the consolidation stage and move between 1,610 and 1,630 for the rest of the week,” he added.
Among heavyweights, Maxis added 18 sen to RM3.80, CIMB and YTL Power gained seven sen each to RM8.09 and RM3.13, respectively, while Maybank, Sime Darby and Tenaga Nasional rose six sen to RM10.46, RM2.45 and RM14.06, respectively.
Newly listed OB Holdings perked up one sen to 25 sen, Capital A was half-a-sen better at 99 sen, Talam Transform eased half-a-sen to two sen and MyEG erased 1.5 sen at 86.5 sen.
On the index board, the FBM Emas Index rose 21.11 points to 12,179.95, the FBMT 100 Index advanced 21.86 points to 11,889.33 and the FBM Emas Shariah Index gained 13.19 points to 12,148.37.
In contrast, the FBM 70 Index dropped 12.21 points to 17,633.50 and the FBM ACE Index slipped 8.11 points to 5,032.28.
By sector, the Financial Services Index went up 33.53 points to 19,158.95, the Plantation Index ticked up 25.05 points to 7,335.34 while the Energy Index fell 1.61 points to 835.96 and the Industrial Products and Services Index shaved 0.60 of-a-point to 174.95.
The Main Market volume climbed to 1.34 billion units worth RM2.0 billion from Monday’s 1.27 billion units worth RM1.94 billion.
Warrants turnover narrowed to 668.37 million units valued at RM107.01 million from 683.45 million units valued at RM94.25 million.
The ACE Market volume slid to 447.69 million units worth RM151.19 million versus 500.44 million units worth RM183.05 million previously.
Consumer products and services counters accounted for 232.47 million shares traded on the Main Market, industrial products and services (222.78 million), construction (77.03 million), technology (181.69 million), SPAC (nil), financial services (88.49 million), property (250.1 million), plantation (33.01 million), REITs (15.09 million), closed/fund (46,100), energy (104.51 million), healthcare (28.1 million), telecommunications and media (23.64 million), transportation and logistics (18.66 million), utilities (68.40 million), and business trusts (53,800).
Source: Bernama
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