KUCHING: Malaysia’s broad money (M3) grew by 5.9 per cent year on year (y-o-y) to RM1.474 trillion in March with the growth in M3 mainly driven by the extension of credit by the financial system to the private sector.
AmResearch Sdn Bhd (AmResearch) in a report highlighted total loan’s growth surging by a moderated 10.2 per cent y-o-y to RM1.247 trillion in March owing to the slowdown for both retail and corporate loans.
Leading indicators for the banking sector also point to a softer outlook ahead. Although loans application had picked up pace, approvals slowed down due to stringent lending practices.
“In March, loans approved grew at a moderated pace of four per cent y-o-y in March 2014.
“Meanwhile, loans applications advanced by 9.5 per cent y-o-y. Aside from that, foreign holdings of MGS declined to 44.1 per cent in March,” noted the research house. The decline in foreign shareholding was mainly due to a faster expansion in total outstanding MGS.
Total outstanding MGS surged by RM8 billion to RM319.6 billion in March. On the other hand, foreign holdings of MGS grew by RM1.4 billion to RM140.8 billion.
Elsewhere, the ringgit appreciated by 0.3 per cent year ot date to close at 3.2655 on April 30. Based on end-April’s close, the 10-year MGS yield stood at 4.069 per cent.
However, the 10-year bond yield has been sliding downwards during the start of May to close at 4.031 per cent on Monday.
“Separately, we gather that the ringgit was unchanged vis-à-vis the greenback in April but had depreciated against most major currencies during the month of April.”