KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Hong Kong dollar bond sales surged to an all-time high of HK$1.28 trillion (US$163B) in Q2 2025 — up 20% QoQ— as short-term borrowing costs fell sharply following central bank intervention.
What Drove the Spike?
HKMA intervention in May to weaken a strong HKD injected liquidity into the market, pushing 1-month HIBOR as low as 0.5% (vs. ~4% in April).
Borrowers seized this rare low-cost funding window, driving both corporate loans and bond issuance to multi-year highs.
Key Data Points
| Metric | Value |
|---|---|
| Q2 Bond Sales | HK$1.28T (record since 1988) |
| Corporate Loans (YTD) | HK$237.8B (+13% YoY) |
| Notable Issuances | HK Gov’t, Alibaba's HK$12B exchangeable bond |
Expert Views
- Raymond Yeung (ANZ):“It’s a rare opportunity. Low HKD funding can support the local economy, but China’s recovery remains essential.”
- Terrence Pang (Fidelity):“Expect strong future issuance from HK government and agencies, especially for infrastructure funding. Global issuers will also continue tapping HKD markets.”
Macro Backdrop
HKMA Policy: Pegged to USD; follows US Fed direction
Current Rate Strategy: HKMA has held rates steady despite earlier easing expectations
Key Risk: Outlook clouded by U.S. tariffs, potential impact on global inflation and Fed policy
Investment Takeaway
✅ Falling borrowing costs + central bank liquidity = bond market boom
✅ Strong momentum from corporate refinancing and public sector infrastructure plans
✅ HKD bond market becoming more attractive for local and international issuers
Risks to Watch:
Reversal in HKMA liquidity strategy
Delayed China recovery
Uncertainty over U.S. trade and Fed rate trajectory
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