KUALA LUMPUR, Dec 16 (Bernama) -- Bursa Malaysia extended its positive performance, closing higher for a fourth consecutive session, supported by improving local market sentiment underpinned by a firm domestic macroeconomic backdrop. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.59 points, or 0.28 per cent, to 1,648.31, from Monday’s close of 1,643.72. The index had opened 0.95 of a point lower at 1,642.77, and moved between 1,636.50 and 1,648.71 throughout the trading session However, on the broader market, decliners beat gainers 699 versus 408. A further 520 counters were unchanged, 1,149 untraded and 12 suspended. Turnover rose to 2.59 billion units worth RM2.27 billion from 2.50 billion units worth RM2.16 billion on Monday.
Key Takeaway
Singapore’s ballooning cash levels are driving strong demand for local bonds, sending returns to the top tier in Asia. With ample liquidity, foreign inflows, and MAS’s currency policy stance, Singapore bonds are increasingly viewed as safe-haven alternatives to U.S. assets.
Market Snapshot
Singapore Bonds YTD Return: +16.6% (2nd in Asia after Thailand)
10Y Yield: ~1.85% (seen stable through year-end – OCBC)
Loan-to-Deposit Ratio: 65.9% (lowest since 2021)
2030 Bond Auction: Bid-to-cover 2.66x (highest in a year)
SGD/USD Forecast: 1.27 by mid-2026 (vs 1.2883 currently)
Drivers of Excess Liquidity
Interbank Rates: SOR fell to lowest since Jun 2022 (–70bps in Aug).
Foreign Inflows: Attracted by AAA rating and Trump’s U.S. fiscal uncertainty.
MAS Policy: FX appreciation stance continues to pull capital into SGD assets.
Lower Loan Growth: Property cooling measures slowing lending → lower loan-to-deposit ratio.
Net Bill Supply Shrinks: MAS issued just S$20.9B YTD vs ~S$51B average in prior 4 years.
Risks Ahead
MAS Surprise Easing (Oct meeting possible):
Neutral stance or re-centering lower of policy band could weaken FX return outlook.
Tariff Uncertainty: Further U.S. tariffs may affect export-led flows.
Global Bond Market Volatility: Sharp U.S. yield spikes could offset safe-haven bid.
Expert Views
Robeco (Philip McNicholas): SGD liquidity to remain flush near term; SORA may fall further.
OCBC (Frances Cheung): 10Y yield likely anchored ~1.85% through 2025; bonds attractive for domestic + foreign buyers.
Investor Watch
Bull Case: SGD appreciation + liquidity flush = continued bond outperformance.
Base Case: Stable yields, steady demand; carry returns remain compelling.
Bear Case: MAS shift in Oct or stronger U.S. yields could drain excess liquidity.
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