Malaysia faces another bond litmus test as contagion worries grow
Tue, 29 Sep 2015
By Reuters
Tue, 29 Sep 2015
By Reuters
- investors could pull billion US$ out of embattled Msia's bond markets
- RM11b (US$2.5 billion) govt bonds to mature Wed
- foreigners own 45% of bonds to pull cash out
- risk-reward of investing in M'sia assets unattractive for now
- significant portion of maturing bond not reinvested
- pushing country step closer to currency reserves crisis
- would send shudders across region
- widening political scandal, tumbling currency take toll on investors
- unnerving neighbours despite central bank's efforts to contain damage
- M'sia's markets down since July, escalating political fallout from 1MDB
RM11 billion worth of gomen bonds fall due on Wednesday (tomorrow). The gomen has to pay RM11 billion. 45% of this amount ie about RM5b is held by foreigners.
With the Ringgit falling they will likely be taking this money out. They will be converting these Ringgits to buy US Dollars, Euros, Yen etc. The Ringgit will slide even further beginning Wednesday. Its already at 4:47 to the US$ now.
MAS and Air Asia are already hurting from the Ringgit slide. They also pay for fuel in US Dollars (besides Ringgit of course). Although fuel prices are down (worldwide) the weakening Ringgit is not helping MAS and Air Asia.
If the Ringgit/Dollar hits RM5.00 MAS and Air Asia will be in real trouble.
Utusan tak payah berterima kasih kepada Najib. Terima kasut boleh lah. Tapi Utusan faham ke keadaan negara kita sekarang?
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