Singapore and Malaysia will be the main beneficiaries of inflows into the region as global funds step up diversification into non-dollar assets after the US lost its top credit rating, according to Macquarie Group Ltd.
International investors will add to holdings of Singapore bonds, the only economy in Southeast Asia with a top rating from Standard & Poor’s, Moody’s Investors Service and Fitch Ratings, the bank said in a research note dated Aug. 6. Malaysia, which has the world’s largest Islamic debt market, will become more attractive to investors in the Middle East, according to Australia’s biggest investment bank.
“The Middle East is becoming increasingly comfortable with Malaysia’s capital markets, which may lead to increasing their global bond allocations into the ringgit,” Huang said in the report. “It is a natural investment destination as part of a portfolio re-allocation away from the US.”
The ringgit will appreciate to 2.91 per dollar by the end of the year, according to the median of 20 forecasts in a Bloomberg News survey. The currency climbed 0.5 per cent to 3.005 per dollar in Kuala Lumpur, capping a 2.1 percent gain this year. It reached a 14-year high of 2.9335 on July 27.
International investors will add to holdings of Singapore bonds, the only economy in Southeast Asia with a top rating from Standard & Poor’s, Moody’s Investors Service and Fitch Ratings, the bank said in a research note dated Aug. 6. Malaysia, which has the world’s largest Islamic debt market, will become more attractive to investors in the Middle East, according to Australia’s biggest investment bank.
“The Middle East is becoming increasingly comfortable with Malaysia’s capital markets, which may lead to increasing their global bond allocations into the ringgit,” Huang said in the report. “It is a natural investment destination as part of a portfolio re-allocation away from the US.”
The ringgit will appreciate to 2.91 per dollar by the end of the year, according to the median of 20 forecasts in a Bloomberg News survey. The currency climbed 0.5 per cent to 3.005 per dollar in Kuala Lumpur, capping a 2.1 percent gain this year. It reached a 14-year high of 2.9335 on July 27.
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