KUALA LUMPUR, April 14 (Bernama) -- Bursa Malaysia ended Tuesday’s trading session higher, in line with gains across regional markets, as sentiment improved on expectations of potential peace talks between the United States (US) and Iran. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 7.60 points, or 0.45 per cent, to 1,688.12 from Monday’s close of 1,680.52. The benchmark index opened 10.44 points higher at 1,690.96 moved between 1,686.06 and 1,694.16 throughout the day. In the broader market, gainers outpaced losers 663 to 455, while 537 counters were unchanged, 1,061 untraded and 12 suspended. Turnover eased to 2.85 billion units worth RM2.67 billion from Monday’s 2.94 billion units worth RM2.64 billion.
Chinese financial markets are showing a rare pattern, with stocks and bonds rising together, as global investors turn to China as a relative safe haven amid geopolitical turmoil.
Rare Positive Correlation Signals Strong Demand
The CSI 300 Index and China’s government bond market have moved in tandem for the first time in two years, with their 90-day correlation turning positive since mid-March.
This unusual alignment reflects broad-based demand for Chinese assets, driven by both domestic support and global capital flows.
Safe-Haven Appeal Strengthens
China has emerged as a relative outperformer during the US-Iran conflict, supported by:
- Lower exposure to Middle East energy disruptions
- Policy measures to cushion oil shocks
- Stable domestic liquidity conditions
Compared to global peers:
- China’s 10-year bond yields rose only ~3 basis points
- US and European yields climbed 40+ basis points
This highlights China’s resilience amid global volatility.
Liquidity and Reflation Support Both Markets
A liquidity-rich financial system is boosting bond demand, while equities are supported by signs of economic stabilisation.
Key drivers include:
- Easing deflationary pressures after years of factory price declines
- Expectations of economic recovery and reflation
- Strengthening renminbi, improving investor confidence
Chinese equities posted a 4.4% weekly gain, their first in four weeks, while long-term bond yields declined, reinforcing the dual rally.
Foreign Funds Return to China
Global investors are gradually increasing exposure.
Data shows active global funds have moved to benchmark-neutral positioning in China, the highest level since 2022, signalling renewed confidence after years of underweight positioning.
Outlook: Temporary Trend or Structural Shift?
While the current correlation reflects external geopolitical factors, sustainability remains uncertain.
Risks include:
- Weak domestic consumption
- Ongoing property sector challenges
- Potential shift in focus back to internal economic issues once global tensions ease
Investor Takeaways
- Chinese stocks and bonds are rising together, a rare signal of broad investor demand.
- China is acting as a safe haven, outperforming global markets amid geopolitical stress.
- Strong liquidity and improving economic conditions are supporting both asset classes.
- Foreign investors are returning, reducing underweight positions in China.
- The trend may be temporary, with domestic economic challenges still a key risk.
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