The Ministry Of Finance (MoF) will continue collaborating with all relevant authorities to further develop Malaysia’s financial market, as well as improve its standing within the global investment community, Minister Of Finance, Tengku Zafrul Tengku Abdul Aziz said in a press statement.
He stated that the MoF would like to recognise the efforts by all relevant parties, particularly Bank Negara Malaysia (BNM), the Financial Markets Committee (FMC), Securities Commission Malaysia (SC), Bursa Malaysia, and the Financial Markets Association Malaysia (FMAM) on their joint and continuous efforts in developing the Malaysian financial market in a structured manner.
“The decision made by FTSE Russell to retain Malaysia in the World Government Bond Index (WBGI) is a testament to the soundness of Malaysia’s sovereign bond market, while reaffirming the country’s strong macroeconomic fundamentals and resilience,” Tengku Zafrul said.
The Finance Minister added that the affirmation also serves as evidence to various effective policies and initiatives aimed at continuously improving market accessibility and liquidity.
“The MOF has also actively participated in many stakeholder engagement sessions in collaboration with Bank Negara Malaysia (BNM) and Financial Markets Association of Malaysia (FMAM) to shape policies on improving Malaysia’s financial market competitiveness, underscored by enhanced governance and transparency through streamlined compliance, regulatory and operational requirements for both local and foreign participants,” he said.
Tengku Zafrul further pointed out that Malaysia has been on the WGBI Watch List since April 2019 and it is a commonly used index that currently includes sovereign bonds from over 20 major countries denominated in a variety of currencies.
Since April 2019, Malaysia has seen a net inflow of RM41.6 billion into its government bonds.
“Foreign holdings in Malaysia’s government bonds also increased to 24.7% in February 2021, compared to 21.9% in April 2019.
“As at end 2020, more than half of the total foreign holdings in government bonds consists of long-term investors such as other central banks and governments at 31.5%, global pension funds at 17.7% and insurance companies at 2.6%.
“In terms of domestic investors, holdings in government bonds are supported by ample liquidity from banking institutions, as well as institutional investors such as Employee Provident Funds (EPF) and Retirement Fund (Incorporated) (Kumpulan Wang Persaraan (Diperbadankan) (KWAP),” Tengku Zafrul said.