Malaysia could see RM33 bil outflow if bonds downgraded, says Morgan Stanley

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Malaysia is being considered for a potential downgrade in FTSE’s World Government Bond Index, making it ineligible for inclusion.

Foreign investors only hold US$37 billion in Malaysian government bonds as of late last month, says Morgan Stanley.

LONDON: Malaysia could see outflows of almost US$8 billion if its bonds are downgraded by global index provider FTSE Russell, Morgan Stanley said in a research note. FTSE said on Monday that it would review Malaysia’s market accessibility level in its World Government Bond Index due to concerns about market liquidity.

Malaysia, currently assigned a “2” and included in the WGBI since 2004, was being considered for a potential downgrade to “1”, making it ineligible for inclusion, FTSE said. Morgan Stanley said foreign investors have been reducing their Malaysian government bond holdings since late 2016 and, as of late March, held US$37 billion .

 

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Can't be true. PH leaders at d beginning of 2019 proudly announced our economy will grow after Q1; v will also c a large inflow of FDIs.

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