Global & Regional Equities
US
US equities ended the week broadly flat, with the S&P 500 inching up 0.1%. The technology sector remained volatile amid continued jitters over stretched AI valuations, though the Nasdaq index held steady at 0.2%.
After weeks of political gridlock, the longest US government shutdown on record—stretching 43 days has finally come to an end. President Donald Trump signed a bipartisan funding agreement, securing government operations through January 31, 2026.
With the US government shutdown temporarily resolved for now, investor focus is shifting back to economic data that had been delayed during the shutdown. The key release will be the September non-farm payroll report, scheduled for 20 November, which will provide a long-awaited update on the health of the US labour market.
A number of Federal Reserve officials struck a less dovish tone last week, emphasising that inflation remains somewhat sticky and signalling reluctance to commit to an imminent December rate cut.
Fed fund futures now imply around a 40% probability of a rate cut in December, down from earlier expectations. As a result, US Treasuries sold off modestly, with the 10-Year yield rising 3bps over the week to 4.15%.Asia
In Asia, markets were largely directionless, with the MSCI Asia ex-Japan index closing marginally higher at 0.1%. Tech-heavy markets such as Taiwan came under pressure, slipping 0.9% as volatility in the AI sector weighed on sentiment.
India was the bright spot in the region. The Sensex rose 1.6% in a relief rally driven by political clarity after Prime Minister Narendra Modi’s BJP-led alliance secured a record victory in the Bihar state election. While the result does not introduce any new positive catalysts, it removes a key political overhang. A loss in Bihar would have raised concerns about eroding popular support within the ruling coalition. Instead, the outcome reinforced political stability, providing markets with a measure of reassurance.
On portfolio action, we reduced exposure to the more volatile technology names last week and rotated into higher-yielding stocks, particularly Korean and Taiwanese banks.
Updates on Malaysia
The KLCI index gained 0.40% last week, supported by strength in the consumer sector, while small-cap counters and the ACE Market continued to face sustained selling pressure.
Across sectors, consumer names were the standout performers, with construction and plantation also closing higher. Healthcare, technology, and utilities lagged behind as investors turned more defensive after recent gains in select large-cap stocks.
On the flow front, foreign investors recorded a net inflow of RM477 million for the week, marking a turnaround that lifted November’s month-to-date flows into positive territory after a soft start to the month. The volume of inflows signalled a meaningful shift in momentum, suggesting renewed interest from offshore funds. As a result, year-to-date foreign outflows have now eased below RM19 billion.
News flow for the week was relatively muted, with no major corporate announcements. The key data highlight was Malaysia’s third-quarter gross domestic product (GDP) results, which came in stronger than expected, supported by resilient domestic demand and an uptick in exports.
From a portfolio standpoint, Malaysian equity funds remain highly invested, with cash holdings in the low single-digit range. Trading activity was light throughout the week, and there were no significant changes to overall strategy or positioning.
Fixed Income Updates & Positioning
Regional Fixed Income
Asian credit markets remained resilient last week, largely insulated from broader macroeconomic weakness. Investment-grade (IG) spreads were unchanged week-on-week, while high-yield (HY) tightened by six basis points (bps). Similarly, in the United States, corporate IG and HY spreads were little changed over the week.
In the global primary issuance market, activity was notably subdued. The slowdown was likely a spillover from funding stress observed in the US. US IG issuance totalled only USD 27 billion, well below the projected USD 40 billion. In Europe, volumes were also softer at around EUR 20 billion, roughly half of expectations. In Asia, US-dollar-denominated new issuance amounted to USD 1.9 billion compared with USD 7.9 billion the week before, marking a broad deceleration in global supply.
The Australian market was an exception, maintaining healthy issuance momentum. Transgrid, the high-voltage electricity transmission operator in New South Wales, priced two hybrid tranches — one floating-rate and one fixed-rate. Both tightened by roughly 25 bps from initial guidance, supported by robust demand, with order books reaching AUD 6.2 billion. This made it one of the standout deals of the week in the Australian market.
From a portfolio perspective, our funds participated in one primary issuance, a sterling-denominated Tier 2 (T2) subordinated bond by Australia and New Zealand Banking Group (ANZ). The GBP 500 million deal was priced at 5.15 percent and has since traded marginally lower in the secondary market following weaker performance in UK government bonds (gilts). Apart from this, the funds were net buyers of credits, selectively adding exposure where valuations were attractive. Cash levels remain healthy at around 2 to 5 percent across portfolios.
Domestic Fixed Income
Malaysia’s bond market recorded a strong week, supported by sustained buying momentum across the curve, particularly in shorter-dated government securities. Flows were largely driven by offshore real-money accounts, with demand concentrated in maturities below three years.
Yields ended the week three to six bps lower across most tenors. The three-year Malaysian Government Securities (MGS) yield declined by five bps, the 10-year MGS eased by six bps to 3.44 percent, while the 30-year MGS fell by four bps to 3.97 percent. Sentiment was further buoyed by a successful 10-year Government Investment Issue (GII) auction, which achieved a strong bid-to-cover (BTC) ratio of 2.6 times on a large RM 5 billion issuance. Demand was led by Islamic banks and onshore investors, with an average auction yield of 3.55 percent. This marked a clear improvement from previous auctions, which had recorded BTC ratios below 2 times, suggesting that the earlier indigestion from heavy corporate supply has now subsided.
Toward the end of the week, trading activity slowed ahead of Malaysia’s third-quarter gross domestic product (GDP) release, which came in line with expectations. Meanwhile, Bank Negara Malaysia (BNM) reported consistent foreign inflows into the local bond market. As of last week, RM 2.6 billion of net foreign inflows were recorded for November, bringing total inflows for October and November to RM 7 billion and year-to-date (YTD) inflows to approximately RM 24 billion. This has been a key driver behind the ringgit’s recent strength.
The Malaysian ringgit was the second-best performing currency in the region last week, appreciating beyond the key resistance level of 4.18, with the next level to watch at 4.10. The ringgit’s appreciation was supported by improving trade data, particularly robust electrical and electronics (E&E) exports, as well as fiscal reforms and subsidy rationalisation that have helped narrow the budget deficit. BNM’s reserves now stand at a 10-year high, further supporting currency stability.
In the corporate bond market, two primary issuances stood out. CIMB Group Holdings Berhad priced a RM 550 million Additional Tier 1 (AT1) non-call 5 bond at 4.03 percent, achieving a BTC ratio of more than four times. Meanwhile, Al-Salam Real Estate Investment Trust (REIT), rated AAA, issued a RM 455 million five-year sukuk at 3.95 percent, with an even stronger BTC ratio above five times.
Looking ahead, the market will see a reopening of the seven-year MGS benchmark worth RM 4 billion. Demand is expected to remain firm, given improving sentiment and steady foreign participation. Upcoming issuances are likely to come predominantly from the banking sector, including CIMB Group’s Tier 2 offering, as well as deals from RHB Bank Berhad and Great Eastern Life Assurance (Malaysia) Berhad.
From a portfolio perspective, the funds participated in both CIMB Group and Al-Salam REIT primary issuances while actively trading government bonds. Funds remain largely invested, with cash holdings between 1 and 3 percent.
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