Tuesday, February 25, 2020

Malaysia gets the most from fund inflows 

Apr 04. 2017
Facebook Twitter


MALAYSIA has emerged as the most favoured emerging market in Southeast Asia year-to-date based on foreign liquidity flow in the local stock market, beating Thailand, Indonesia and the Philippines.


Overseas investors were again net buyers of Malaysian equities, adding 180 million ringgit (Bt1.4 trillion) worth of stocks on Monday to their portfolio.

They have so far this year pumped close to 6 billion ringgit into the local stock market.

The inflow reversed the 3-billion-ringgit outflow seen last year.

“The strong foreign liquidity flow into local equity is an inevitability that the market has been waiting for,” MIDF Research said.

The FTSE Bursa Malaysia KLCI added 5.40 points, or 0.3 per cent, on Monday to 1,745.49 points, opening its account in the second quarter on a strong note.

The index is up 6.3 per cent so far this year, rising faster than bourses in Indonesia and Thailand.

“Relatively low foreign ownership of stocks, strong corporate fundamentals and an unjustifiably weak currency make Malaysian equity hard to ignore,” MIDF Research said.

The FBM KLCI is projected to record 7.2-per-cent and 8.3-per-cent growth in earnings for the financial years 2017 and 2018, AmInvestment Bank said in a recent note, against the backdrop of a more stable currency outlook.

According to MIDF Research, foreign liquidity flow to Bursa Malaysia had remained elevated for the third consecutive week, with foreigners buying 1.14 billion ringgit worth of shares in the open market during the week ended March 31.

The net foreign inflow excluded off-market deals.

For regional comparison, net foreign inflows to Malaysian equities in the first quarter totalled US$1.29 billion (5.71 billion ringgit), the highest within the emerging Asean market.

This compared with Thailand, which saw total net foreign inflows of $680.3 million (Bt23.42 billion) into its equities, and Indonesia, which registered net foreign inflows of only $184.9 million into its equities.

The Philippines, on the other hand, has registered net foreign outflows of $347.9 million from its equity market year-to-date.

MIDF Research pointed out that for the week ended March 31, foreign participation on Bursa Malaysia remained at an elevated level, with the foreign average daily trade value at 1.05 billion ringgit.

This compared with 1.26 billion ringgit in the preceding week.

In general, Bursa Malaysia had seen eight consecutive weeks of net foreign inflows.

“As of last Friday, foreign net buying had extended for 15 trading days, the longest streak since March last year,” MIDF Research said.


Facebook Twitter
More in Business
Editor’s Picks
Top News