Senior Economist Julia Goh and Economist Loke Siew Ting at UOB Group examine the ultra-modern overseas portfolio figures in Malaysia.
Key Takeaways
“Malaysia noticed a reversal in overseas portfolio flows ultimate month, logging a internet outflow of MYR2.0bn in Sep (from a giant internet influx of MYR7.6bn in Aug). This got here as overseas traders shied away from each Malaysian fairness (Sep: -MYR1.6bn, Aug: +MYR2.0bn) and debt (Sep: -MYR0.4bn, Aug: +MYR5.6bn) markets following tighter world economic and monetary stipulations at some point of the month.”
“Bank Negara Malaysia (BNM)’s overseas reserves declined for the 2d straight month and by way of a large magnitude of USD2.1bn m/m to USD106.1bn as at end-Sep (end-Aug: -USD0.9bn m/m to USD108.2bn). It marked the lowest stage when you consider that Nov 2020 and has taken into account the quarterly overseas alternate revaluation changes. The ultra-modern reserves role is enough to finance 5.6 months of imports of items and offerings and is 1.1 instances of the complete temporary exterior debt.”
“Given that traders stay cautious on unsure coverage course globally and involved about a international recession subsequent year, we see heightened volatility in overseas capital flows into rising markets which include Malaysia. Domestic political and coverage uncertainties will pose in addition draw back dangers to non-resident portfolio flows into Malaysia in the close to term. With this and expectations of continual USD power and CNY weakness, the MYR weak point sees little respite and probably to hit the 4.70 degree beforehand than we had projected.”
