Foreign funds propel Bursa to highest level since August 2015
Analysts expect market breadth to stay high as investor interest stays firm
FOREIGN institutional buying yesterday pushed Bursa Malaysia to its highest close since August 2015 to outperform other key Asian markets.
The benchmark FTSE Bursa Malaysia KLCI gained 1.11 per cent, or 19 points, to close at 1,727.36 on strong interest in bank stocks as well as those linked to Genting Group and Axiata Group Bhd.
Analysts expect market breadth to stay elevated as investor interest remains firm.
This will continue to encourage rotational play as investors switch to laggards.
They added that foreign funds were doing some catching-up buying, given the local bourse was a laggard compared to its regional peers.
MIDF Research said foreigners had bought RM1.4 billion net of local shares as of Friday, compared with a net sale of RM3 billion last year.
Year-to-date, the key index has gained 5.22 per cent.
RHB Investment Bank Bhd chief executive officer Robert Huray expects liquidity to return to the market this year.
“We are optimistic as we are more certain of this year than last year, as the volatility brought on by the United States presidential election and Brexit (Britain voting to leave the European Union) has tapered off,” he said after announcing the grand prize winner of RHB’s inaugural “Trade & Win” campaign yesterday.
“We will see a stronger equity market this year versus last year and even if the Malaysian election is called, we have already priced it in,” added Huray .
Banks were among the top gainers, with CIMB Group Holdings Bhd, Malayan Banking Bhd (Maybank) and Public Bank Bhd leading the pack.
Moody’s Investors Service said in a recent report that oil and gas loans made up less than four per cent of Malaysia’s six largest banks’ total loan portfolios at the end of last year.
By contrast, the asset quality of the banks’ Malaysian operations remained robust last year.
CIMB yesterday increased 24 sen to RM5.46, boosted by the latest news that its Indonesian operations may have seen the worst in terms of bad loans.
Maybank edged up nine sen to RM8.82, Public Bank gained six sen to RM19.94 and RHB Bank Bhd rose two sen to RM5.12.
Genting Malaysia Bhd added 23 sen to RM5.52 and Genting Bhd was 25 sen higher to RM9.41, while Axiata gained eight sen to RM4.70.
On the external front, Japan’s Nikkei 225 fell 0.46 per cent, Hong Kong’s Hang Seng Index gained 0.18 per cent, Shanghai’s Composite Index gained 0.48 per cent, Hang Seng China Enterprise added 0.26 per cent and Singapore’s Straits Times Index fell 0.04 per cent.