KUALA LUMPUR (May 21): Amid steady foreign appetite and abating selling pressure, domestic bond yields tumbled in April.

In a statement, RAM Ratings said the benchmark 10-year Malaysian Government Securities (MGS) yield fell 10.8 basis points (bps) to 3.14%, the first month-on-month decline in three months.

The reprieve from the global sell-off also halted the rise in US Treasury (UST) yields last month, with the 10-year UST yield ebbing nine basis points (bps), versus a 30 bps rise in March, the ratings agency said.

RAM noted that regional markets also followed suit, with 10-year government bond yields in Singapore, Thailand and Indonesia declining 15bps, 13.4bps and 23.9 bps respectively.

Meanwhile, net foreign purchases of Malaysian bonds further accelerated in April, rising to RM6.4 billion from RM5.9 billion in March.

This extends the current streak of foreign buying to 12 months for a total of RM60.2 billion, said RAM.

“More than 90% of this total purchase went to government bonds (i.e. MGS and Government Investment Issue), mainly underpinned by ‘sticky’ investors (i.e. central banks, governments, pension funds and insurers),” it said.