Bursa’s LEAP of faith

The global economy is starting to shows signs of strength following years of uncertainties and volatility driven by major events such as US’ General Election and UK’s surprise Brexi.

This year, global economic experts and agencies predict that 2017 is a year of recovery for most major economies, including Malaysia.

The International Monetary Fund (IMF) in its World Economic Outlook report last month, said that it expected global growth to rise 3.6 per cent in 2017 and 3.7 per cent in 2018. For Malaysia, it expected Malaysia’s economic activity to expand 5.4 per cent in Malaysia.

In the second quarter of 2017 ( 2Q17), Malaysia recorded a growth of 5.8 per cent, supported by domestic and improved external sector.

For corporate Malaysia, Bank Negara Malaysia (BNM) in its 2Q17 Quarterly Bulletin saw that equity indices improved in 2Q as businesses in advanced economies continue to record improvements in corporate profits.

“Broad-based growth improvements in many economies around the world also provided tailwinds to global stock markets.

“Volatility in the global financial markets was lower as developments during the quarter were largely within market expectation,” BNM said.

The global market’s recovery is also clearly reflected in the performance of Malaysia’s bourse.

BNM pointed out that in 2Q17, the domestic equity market saw higher non-resident holdings at 23 per cent of the total equity market capitalisation.

“Along with global equity markets, the FBM KLCI rallied by 1.4 per cent in 2Q17 to end at 1,763.67 points. Technology, construction, financial and consumer sector stocks had driven gains in the market.

“The average price-to-earnings (PE) ratio for the FBM KLCI stood at 16.8 times, comparable against a long-term average of 16.5 times,” BNM reported.

“In addition, trading liquidity in the capital markets was sustained with the bid-ask spreads for MGS and FBM KLCI at 0.1 and 0.5 per cent of mid-price, respectively.”

During Invest Malaysia 2017, Datuk Seri Najib Tun Razak said, Malaysia’s capital market increased by nine per cent to a level of RM3.1 trillion in the first six months of this year, and now ranks fifth in Asia relative to GDP.

“In fact, in the equity market there were net inflows of RM11 billion in the first half of 2017, compared to RM3 billion of net outflows during the whole of 2016.”

He further pointed out that Malaysia is also home to the largest number of listed companies in Asean.

“At US$29 billion, Bursa Malaysia also recorded the highest amount of funds raised in the last five years in any country in our ten nation association,” he added.

With that, BizHive Weekly explores Bursa Malaysia’s performance so far this year and efforts that are being made to reinvigorate the exchange’s activity.

In fact, in theth equity market there were net inflows of RM11 billion in the first half of 2017, compared to RM3 billion of net outflow during the whole of 2016.

Datuk Seri Najib Tun Razak, Prime Minister