KUALA LUMPUR, July 31 — Global investors cut holdings of Malaysian local-currency bonds in June from a record high in May, a central bank report showed today.
The holdings, which include government and corporate notes, decreased 0.5 percent to RM248.2 billion (US$78 billion) from RM249.5 billion in May, according to data on Bank Negara Malaysia’s website. Ownership of conventional sovereign debt rose 1.8 per cent to RM147.3 billion, while holdings of Islamic securities climbed 36 per cent to RM7.4 billion.
Malaysia’s government bonds have gained this month as the current-account surplus provides support for the ringgit, which also strengthened on odds interest rates will rise further in 2014. The central bank increased borrowing costs for the first time in three years on July 10 to 3.25 per cent from 3 per cent.
The Bloomberg Malaysia Local Sovereign Index advanced 0.7 per cent in July, the biggest monthly increase since October 2013. It has climbed 3.3 per cent so far this year.
The ringgit appreciated 0.5 per cent in July, a third month of gains, to 3.1957 per dollar in Kuala Lumpur, according to data compiled by Bloomberg. That’s the biggest advance among Asian currencies after Indonesia’s rupiah and Thailand’s baht.
Malaysia had a current-account surplus of RM19.8 billion in the first quarter, widening from RM14.8 billion in the previous three months, official data show. The second- quarter data will be released Aug. 15. — Bloomberg
