Bank Negara: Domestic financial markets mixed in September

by BERNAMA / pic by TMR FILE

DOMESTIC financial markets were mixed in September, due to a confluence of global and domestic factors.

In its September highlights, Bank Negara Malaysia (BNM) said that expectations for prolonged accommodative monetary policy in the advanced economies broadly supported yield-seeking activities in the region.

Consequently, this led to non-resident inflows to the domestic bond market and the exchange rate to appreciate by 0.4 per cent during the month.

Meanwhile, the government bond market remained supported by these inflows, with the 10-year Malaysian Government Securities (MGS) yield increasing marginally by 4.5 basis points.

Bursa Malaysia’s FBM KLCI declined by 1.3 per cent during the month, in line with broad-based declines in global equity markets.

“Equity market sentiments turned cautious amid expectations for a second round of movement restrictions in Europe and political gridlock over the United States fiscal stimulus bill, which spurred concerns on the global economic recovery,” said the central bank.

BNM said overall, the banking system remains well-positioned to withstand macroeconomic and financial shocks, and continues to support intermediation activity with sustained strong capitalisation levels.

“Banks’ excess capital buffers stood at RM123.7 billion as at September 2020,” it noted.