The Wall Street Journal (WSJ), which broke the news about US$700 million (RM2.6 billion) of funds going to private bank accounts of Prime Minister Datuk Seri Najib Razak, has now posted documents online that detail the money trail.
Constitutional crisis is a situation that a legal system's constitution or other basic principles of operation appear unable to resolve; it often results in a breakdown in the orderly operation of government.
Zeti: Ringgit will regain strength again ~ 1 Oct 2015
Malaysian govt bond yields fall after Zeti’s assurance
By Gho Chee Yuan 1 Oct 2015
Malaysian government bond yields fell as prices rose after Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz assured that the country’s bond market would not crash even if foreign investors decided to sell their investments.
Yesterday, the yield on 10-year government bonds fell to 4.14% from 4.31% a day earlier, according to Bloomberg data. Prices rose to RM98.50 from RM97.15.
Bond yields and prices have an inverse correlation. The yield data is the latest from Bank Negara, which updates the information once a day.
The Edge Financial Daily quoted Zeti as saying the country’s bond market would not crash due to support from local institutional investors.
Local institutional support will mitigate the impact from foreign selling, according to her.
“We have our own domestic institutional investors, like the Employees Provident Fund, Permodalan Nasional Bhd and Lembaga Tabung Haji. The insurance industry is also a major player in the bond market.
“Our own institutional investors will step in to purchase those (bonds). So we don’t expect any collapse in our bond market,” she told reporters after making her opening remarks at the Malaysia-OECD High Level Global Symposium on financial well-being yesterday.
Zeti’s comments came at a time when the ringgit has weakened against the US dollar in anticipation of a US interest rate hike this year.
Lower prices of commodities, such as crude oil, and concerns about Malaysia’s political landscape amid investigations on state-owned 1Malaysia Development Bhd also had an impact on the ringgit.
Today, the ringgit weakened to 4.4143 against the US dollar after depreciating recently to a new point at 4.4812.
The current exchange rate compares with the strongest level at 3.2330 over the last one year.
According to Standard Chartered’s global focus report today, the high foreign ownership of Malaysian government bonds was a risk to the ringgit.
Foreign ownership of Malaysian government bonds stood at 46% as of August this year, according to Standard Chartered.
“High foreign ownership of local-currency conventional government bonds poses another risk — as of August, foreigners owned about 46% of outstanding Malaysian Government Securities (MGS). As such, the MYR may remain vulnerable in the short term,” Standard Chartered said.