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.
As uncertainty builds around US trade and fiscal policy, global fixed-income investors are moving east — and not quietly.
Key Stat:
$1.5 trillion in local-currency bonds issued in Asia Pacific so far in 2025 — a record high, up 6% YoY.
What’s Driving the Shift?
The big trigger? President Trump’s tariff flip-flops, particularly the April 2 surprise that rattled global markets. The result: investors are hedging against US policy risk and diversifying out of dollar assets.
“Large inflows from pension and sovereign wealth funds are now flowing into Asia,” says Daniel Tan of Grasshopper Asset Management. And the performance justifies it:
Bloomberg Asia Pacific Aggregate Index is up 3.9% YTD, outpacing the US equivalent at 3.5%.
Where the Flows Are Going
India: ₹6.6 trillion ($76.4B) in corporate bond issuance, a 29% jump YoY
China: Over $1T issued locally as firms take advantage of lower borrowing costs
Australia & Singapore: AAA-rated economies attracting risk-averse flows
Euro market: €49B+ issued by APAC borrowers — already beating 2024's full-year total
De-Dollarization in Action
The logic is clear.
- The US no longer holds AAA status across all major agencies.
- Australia, on the other hand, retains top ratings and a healthy fiscal outlook.
“No one in the world is talking about the fiscal viability of Australia,” says Oliver Holt from Nomura.
This underscores a rising preference for regional strength and stability — a trend that benefits local bond markets from Tokyo to Mumbai.
Takeaway for Investors
The narrative is shifting. Tariff volatility, ballooning US debt, and geopolitical unpredictability are accelerating a reallocation toward Asia’s local-currency bonds. This is more than a reaction — it’s the start of a broader portfolio recalibration.
✅ Watch for increasing euro, offshore yuan, and AUD issuance
✅ Track pension fund allocations in Asia and the Middle East
✅ Expect policy divergence to widen US-Asia credit spread opportunities
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