· Foreign holding as a percentage of total local debts rose 0.56 percentage points to 21.1% in

Dear Readers, Highlights of the report as follow:-

·         Foreign holding as a percentage of total local debts rose 0.56 percentage points to 21.1% in July 2016. Month-on-month basis, net inflows was RM5.4 billion supported by yield hunting related flows into emerging markets as global yields plunged to a new low and in response to BNM’s OPR surprise 25 bps cut on 13 July 2016. ·         Meanwhile, foreign shareholding of MGS and GII scaled to a new high of RM185.3 billion and RM24.4 billion in July. As a percentage of foreign shareholdings of MGS to total MGS outstanding, the ratio stood at 51.9% in July, its historical high in our record since January 2006. ·         We maintain an overweight on the duration, targeting 3.49% for the 10-year MGS. On the curve, we continue to prefer belly (7y-10y) sector given our expectations of further monetary easing.