Foreign investors continued their buying spree in November, driving net inflows into Malaysian bonds to RM6.1 billion, up from RM4.4 billion in October, marking the strongest six-month gain. The inflows were largely concentrated in Malaysian Government Securities (MGS) and Corporate Bonds and Sukuk (CBS), reflecting growing confidence in Malaysia's economic resilience.
Foreign holdings rose to RM297.8 billion, increasing their share of total outstanding debt to 13.3% from 13.1% in October. Analysts cite Bank Negara Malaysia's (BNM) steady policy stance, with the Overnight Policy Rate held at 2.75%, along with a firmer ringgit, as key drivers of the momentum. Strong macroeconomic indicators—including 5.2% GDP growth in 3Q25, a 15.7% surge in October exports, and approved investments of MYR285.2 billion in the first nine months—reinforced investor confidence. Unemployment remained low at 3.0%, while retail and industrial activity showed sustained demand.
In the bond market, foreign inflows were concentrated in MGS, which saw RM5.0 billion of inflows (Oct: RM0.7 billion), lifting foreign ownership to 33.9%. CBS also recorded significant inflows of RM2.1 billion, including RM1.4 billion in sukuk, raising foreign holdings to 2.2%. Conversely, Government Investment Issues (GII) recorded outflows of RM1.1 billion, with foreign ownership easing to 8.0%.
On the equity side, foreign investors slowed their selling, with net outflows narrowing to RM1.1 billion (Oct: -RM2.7 billion). Selling pressure was mostly concentrated in utilities and industrial products, while flows in other sectors remained balanced.
Overall, Malaysia posted a net capital inflow of RM4.9 billion in November, compared with RM1.7 billion in October. Year-to-date, the debt market attracted RM22.6 billion in inflows, offsetting RM20.3 billion in equity outflows, leaving net capital flows at RM2.3 billion.
Looking ahead, demand for Malaysian bonds is expected to remain firm. Analysts note that anticipated Federal Reserve rate cuts of around 75 basis points in the next six months, coupled with Malaysia's solid macro fundamentals, stable sovereign rating, and structural reforms, make local debt attractive to foreign investors. Strengthened trade links and expectations of a stronger ringgit further support the outlook.
