Malaysia in strong po­si­tion with cu­mu­la­tive net in­flow near­ing US$2.5b so far this year, says MIDF Re­search

New Straits Times - - Business -

MALAYSIA has out­paced most of its South­east Asian peers in be­ing the ben­e­fi­ciary of net in­flow of for­eign funds, says MIDF Re­search.

De­spite In­done­sia hav­ing fol­lowed closely be­tween March and May, its trend has been on the re­verse of late, it added.

Al­though the num­bers had been ta­per­ing in the past month, Malaysia re­mained in a very strong po­si­tion, with a cu­mu­la­tive net in­flow near­ing the US$2.5 bil­lion (RM10.7 bil­lion) mark, said MIDF Re­search in a note yes­ter­day.

For­eign funds had been net buy­ers on Bursa Malaysia in 26 out of the 31 trad­ing weeks so far this year, it said.

The ag­gre­gate net in­flow of for­eign funds in the first six months amounted to RM10.17 bil­lion. The cu­mu­la­tive net in­flow off­sets about 30 per cent of the to­tal net out­flow recorded be­tween 2014 and 2016.

Out of the to­tal net in­flows in the first half, ma­jor ben­e­fi­cia­ries con­sisted of mainly bank­ing, oil and gas, and gam­ing-re­lated stocks.

Op­ti­mism on the bank­ing coun­ters was un­der­pinned by earn­ings growth, said MIDF Re­search.

Among the favourites, CIMB Group Hold­ings Bhd, Malayan Bank­ing Bhd and Pub­lic Bank Bhd saw in­flows amount­ing to RM1.7 bil­lion, RM1.43 bil­lion and RM760 mil­lion, re­spec­tively, be­tween the fourth quar­ter of last year and June this year.

Since then, their for­eign share­hold­ing lev­els had been on an up­ward tra­jec­tory and should im­prove fur­ther, it noted.

MIDF Re­search ad­vised in­vestors not to fret over pos­si­ble down­trends in for­eign share­hold­ings.

“Based on Bursa Malaysia’s data, the per­cent­age of for­eign share­hold­ings based on mar­ket cap­i­tal­i­sa­tion in the lo­cal bourse had climbed 0.7 per­cent­age point to 23 per cent as of June this year com­pared with 22.3 per cent in De­cem­ber last year.

“While this is ar­guably still far from the the post-fi­nan­cial cri­sis high of 25.2 per cent in May 2013, this is not nec­es­sary a rea­son to worry,” it added.

MIDF Re­search ex­pects the lo­cal stock ex­change to be on the up­trend, al­though it keeps its year-end tar­get of 1,830 points for the bench­mark FTSE Bursa Malaysia KLCI (FBM KLCI).

“The mar­ket is ex­pected to be on the up­trend, al­beit at a slower climb­ing pace than that seen dur­ing the first half, un­der­pinned by con­tin­u­ous earn­ings ex­pan­sion this year and also for 2018.

“Af­ter all, Malaysia is home to the world’s long­est bull mar­ket,” it said.

For­eign­ers were net buy­ers on Bursa Malaysia for 18-straight weeks from Fe­bru­ary 10 to June 9, the long­est streak since the first half of 2013.

As of Wed­nes­day, the bench­mark FBM KLCI has gained 8.2 per cent on the back of strong for­eign in­flows.

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