‘EARNINGS PROSPECTS ATTRACT FOREIGN INVESTORS TO BURSA’

KUALA LUMPUR: Foreign investors continue to look at the Malaysian stock market as an attractive investment destination because of corporate earnings prospects and a stable economy.

A total of RM2.9 billion net of foreign funds flowed into Bursa Malaysia as of yesterday, the highest among Southeast Asian bourses.

The influx of foreign funds pushed the benchmark FTSE Bursa Malaysia KLCI to its highest level in four years at 1,870 points. Some analysts believe strong corporate earnings are supported by investor confidence in the country’s strong economic fundamentals.

In Southeast Asia, only Malaysia and Vietnam have attracted net foreign fund inflows. Vietnam pulled in RM1.6 billion of funds year-to-date.

On the other hand, Indonesia, the Philippines and Thailand are experiencing foreign fund outflows.

MIDF Research analyst Adam Mohamed Rahim said as of last Friday, RM2.85 billion of foreign funds had flowed into Malaysia.

He said Malaysia is enjoying robust inflows because of political stability, according to a recent World Bank report.

Adam said the increase in foreign inflows had helped the economy grow 5.9 per cent last year, the highest since 2014.

“Private investments have also helped increase the gross domestic product growth to 26 per cent in 2016 compared with 23.4 per cent in 2010.

“This is different from Thailand, for example, which has been showing a slowdown,” he told NST Business.

According to MIDF Research data, foreign investors have been buying into local stocks in the last 12 weeks.

The participation of foreign and retail investors was strong last week, with investments exceeding RM1 billion.

AmBank Research said the stock market would continue to benefit from strong economic fundamentals.

It said economic growth would also be supported by a stronger ringgit.