World’s biggest fund buys more Malaysian govt bonds

Norway’s sovereign wealth fund raised its exposure to Malaysian bonds in the second half of 2025.

Norway’s Norges Bank manages the Government Pension Fund Global, the world’s single-largest investor with investments totalling US$2.1 trillion.

PETALING JAYA:

 Malaysian government bonds continue to attract the attention of Norway’s sovereign wealth fund, the world’s biggest investment fund.

The Government Pension Fund Global (GPFG) had steadily raised its holdings of Malaysian government bonds in 2025, particularly in the second half of the year (2H 2025).

Its exposure to the government bonds surged nearly 2.5 times to US$1.44 billion (RM5.67 billion) in 2H 2025 from US$580.6 million (RM2.29 billion) in the first half, according to The Edge’s analysis of its latest half-yearly disclosure.

In the first half of 2025, the fund had more than tripled its holdings of Malaysian government bonds.

Meanwhile, its holdings of bonds issued by national oil corporation Petroliam Nasional Bhd (Petronas) rose to US$318 million in the second half.

Its bond purchases lifted its total fixed income portfolio in Malaysia to US$1.47 billion at end-2025, from US$610 million six months earlier.

Its ramp up of government bond purchases aligns with a strategy of increasing fixed-income investments alongside a more selective approach to Malaysian equities.

The sharp increase in Malaysian bond holdings came as the ringgit appreciated by more than 10% against the US dollar in 2025 and the country’s economy performed better than anticipated.

In addition, Bank Negara Malaysia has kept interest rates steady, adding to the appeal of the country’s assets even as central banks in the region and globally started lowering rates.

GPFG has reduced slightly the number of Malaysian companies it invests in though the value of its equity investments has risen.

The fund ended 2025 with 200 stocks worth US$2.8 billion, compared with 209 firms valued at US$2.53 billion six months earlier.

The financial sector accounted for more than a third of GPFG’s Malaysian equity portfolio, followed by industrials at 14.6% and technology at 8.5%.

The fund’s investments in Malaysia totalled US$3.15 billion as at end-2025, equivalent to about 0.2% of its global portfolio.

As of end-September 2025, the total outstanding value of the Malaysian bond and sukuk market reached RM2.24 trillion, driven by strong government and corporate issuances.

This market, one of Southeast Asia’s largest, comprises about 58% government bonds (RM1.29 trillion) and 26% corporate bonds (RM577.99 billion).

GPFG is the world’s single-largest investor, owning stakes in about 7,200 companies globally worth nearly US$2.1 trillion, or equivalent to almost 1.5% of all shares in the world’s listed companies.

The fund is managed by Norges Bank, the Norwegian central bank, to invest the country’s surplus revenues from its petroleum sector for the nation’s future generations. - FMT