HALISTER1: Gains in Malaysian Bonds Seen Capped By Limited Demand: ANZ

Gains in Malaysian Bonds Seen Capped By Limited Demand: ANZ

(Bloomberg) -- Malaysian government bonds dropped Thursday on seasonal year-end weakness and the market will struggle to rally from here amid limited demand from investors, says Jennifer Kusuma, a senior Asia rates strategist at Australia & New Zealand Banking Group Ltd.
  • “While domestic investors are broad and deep enough to absorb net issuance, they have been buying more year-to-date compared to past years, so any incremental demand from them would be defensive in nature,” says Singapore-based Kusuma
  • In absence of foreign purchases, Malaysian bonds would find it hard to rally
  • Still, there’s unlikely to be excessive divergence with U.S. Treasuries as the worst of outflows from Malaysian bonds is probably over
  • NOTE: 10-year govt yield rises 8bps to 3.98%; fell 16 bps in past three days
To contact the reporter on this story: Liau Y-Sing in Kuala Lumpur at yliau@bloomberg.net To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net Patricia Lui

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Source: BFW (Bloomberg First Word)

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Jennifer Kusuma (Australia & New Zealand Banking Group Ltd)

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