Foreign reserve at US$136.3b after capital outflow

KUALA LUMPUR: Some US$800 million (RM2.57 billion) left the capital market last month, leaving Malaysia with a foreign reserve of US$136.3 billion.

CIMB Research said this was mainly due to portfolio rebalancing ahead of the United States Federal Reserve's anticipated tapering its monetary stimulus by the second quarter of next year.

"The reserves are sufficient to finance 9.5 months of retained imports and are 3.7 times short-term external debt. In the January-November period, the foreign reserve had decreased by US$3.4 billion, compared with a US$5.5 billion increase in the same period last year," it said.

CIMB said net foreign selling in the domestic equity market accelerated last month but foreign investors continued to stock up on Malaysian bonds.
Foreign ownership of Malaysian debt securities rose to RM235.5 billion at end-October, helping the 10-year Malaysian government securities (MGS) bond yields rise by 59 basis points year-to-date to 4.07 per cent at end-November.

Foreign holdings of MGS stood at 46.7 per cent of total MGS outstanding as at end-October, while foreign investors sold RM3.2 billion worth of domestic equities in November.

The latest foreign ownership of Malaysian equities eased to 22.6 per cent in October.