now loading...
Wealth Asia Connect Middle East Treasury & Capital Markets Europe ESG Forum TechTalk
Bank Negara chief says Malaysia bond market will not collapse
Malaysia’s bond market will not collapse since local funds will fill the gap and invest in the bond market, Bank Negara Malaysia (BNM) governor Tan Sri Zeti Akhtar Aziz said at the Malaysia-OECD High Level Global Symposium held in Kuala Lumpur.
The Asset 30 Sep 2015

Malaysia’s bond market will not collapse since local funds will fill the gap and invest in the bond market, Bank Negara Malaysia (BNM) governor Tan Sri Zeti Akhtar Aziz said at the Malaysia-OECD High Level Global Symposium held in Kuala Lumpur.

 

Despite foreign investors withdrawing their capital from Malaysia, Zeti is certain that it will not impact the bond market significantly.

 
“We have our own domestic institutional investors like EPF, PNB, Tabung Haji," Zeti said, referring to retirement fund Employees Provident Fund, fund management company Permodalan Nasional Berhad and pilgrims fund Lembaga Tabung Haji.
 
"The insurance industry is a major player in the bond market so our own institutional investors will step in to purchase those, so we don't expect any collapse to our bond market," she told reporters after delivering her address at the “Malaysia-OECD High-level Global Symposium” on financial well-being today.
 
Zeti made the remarks in reaction to a statement by Datuk Seri Abdul Wahid Omar, the former chief executive officer for Maybank and now the minister in charge of economic planning, who said Malaysia’s currency and economy are suffering from “an almost perfect storm”, due to an outflow of funds from emerging markets, low oil prices and an economic slowdown in China. But despite this, he still believes that Malaysia is in a stronger position than it was in the 1997 Asian financial crisis.
 
Asian bonds pressured by Interest rate
 
Asian bond markets were buffeted by strong headwinds, including anticipation of the US Federal Reserve rate hike, which has led to an outflows of funds in some countries,” said ADB Chief Economist Shang-Jin Wei. “The uncertainty in global bond markets points to the need for continued efforts to strengthen local currency bonds, which together with prudential regulations, can improve a country's resilience to foreign monetary and financial shocks.”
 
 
Meanwhile in Asia, currency depreciations pose threats to corporates with large amounts of foreign currency denominated debt, while further falls in commodity prices could hurt highly leveraged companies in the sector.
 
The ringgit, Asia's worst performing currency, has lost a quarter of its value against the US dollar this year and fallen to its lowest levels since the Asian financial crisis 17 years ago. The countries bonds have also fallen significantly.
 

 

Conversation
Nicolas Marquier
Nicolas Marquier
country manager, Singapore, Malaysia and Brunei Darussalam
International Finance Corporation
- JOINED THE EVENT -
5th ESG Summit
Swinging into action
View Highlights
Conversation
Mildred Chua
Mildred Chua
managing director and group head of syndicated finance
DBS
- JOINED THE EVENT -
In-person roundtable
Finding opportunity amid volatility
View Highlights