The outflows, it said, were likely to have been triggered largely by debt maturities.
Maybank Investment Bank Bhd noted that sovereign notes worth RM19.7 billion matured last month.
Overseas holdings decreased 0.4 per cent to RM213 billion, according to Bank Negara data released Monday.
The yield on Malaysia’s benchmark five-year notes has retreated 42 basis points in the past 12 months and reached the lowest level since May 2013 last month.
In the preceding 12 months, however, Malaysian Government bonds had rallied and benefitted from a global yield hunt.
“The decline in foreign holdings is primarily maturity-driven,” Bloomberg quoted Winson Phoon, a fixed-income analyst at Maybank Investment Bank in Kuala Lumpur as saying.
The outlook was neutral “with a cautious tone for foreign demand” due to external uncertainties such as the US presidential election, talk of tapering of asset purchases by the European Central Bank and a potential Federal Reserve interest-rate increase, he said.
The yield on government securities due 2021 was steady at 3.27 per cent as of 4.33 pm Monday, Bloomberg reported