MONTHLY REVIEW: BOND SELL-OFF ON RESILIENT US ECONOMY - FEBRUARY 2024 - FULL REPORT
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| Report ID |
60538900469692 |
Popularity |
242 views 26 downloads |
| Report Date |
Mar 2024 |
Product |
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| Company / Issuer |
Fixed Income Bond Market Update |
Sector |
Bond Market Update - Bond Market Update |
| Price (RM) |
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| Rationale |
Summary
- Malaysia registered a weaker-than-expected gross domestic product (GDP) growth of 3.0% in 4Q2023 (advanced estimate: 3.4%; 3Q2023: 3.3%) as growth in the services sector moderated while that in the manufacturing sector remained tepid, bringing the full-year GDP growth to 3.7%. We forecast a firmer growth of 4.2% in 2024 on an anticipated recovery in the tourism and external sectors, as well as a positive investment outlook.
- The ringgit continued to weaken against the greenback in February, partly attributable to the broad US dollar strength. Furthermore, the ringgit’s weakness highlights the need for more robust reforms to enhance Malaysia’s capabilities in foreign currency accumulation.
- The Malaysian Government Securities (MGS) market moved in tandem with the rise in US Treasury (UST) yields following market expectation of a higher-for-longer interest rate environment. The shifting interest rate trajectory in advanced economies and the ringgit’s weakness may lead to extended periods of volatility in the local bond market going forward.
- The local corporate bond market rallied in February, with yields of the high-rated bonds dropping across all categories. The rally in the local corporate bond market and the fund inflows in the equity market suggest broadly positive investor sentiment.
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