Inflow of foreign funds likely to improve in the coming weeks, says analyst

KUALA LUMPUR: Foreign fund inflow is expected to improve in the coming weeks as evident by the RM123.3mil in foreign funds which came in last Thursday – the highest inflow since Nov 8.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew said the heavy inflow also helped to pare down the week’s net foreign outflow to RM181.1mil.

He said this could be an indication that foreign funds were looking at Malaysia more positively while the country’s consistent current account surplus has aided the strong sentiment.

“They realise that Malaysia is one of the few emerging markets that has consistently recorded a current account surplus. In the last 20 years, we have not recorded any current account deficit, meaning that we are living well within our means, we are not overspending and not over-importing,” he told Bernama.

Pong also said foreign investors were also not affected by the recent developments surrounding Tabung Haji (TH) and were not reducing its exposure in the equity market as adopted a broad view of the market.

However, he said TH’s intention to sell its stakes, especially in small cap counters would have a big impact on the local equity market and affect sentiment among local investors. Given the size of its funds, it could be even as much as RM10bil worth of shares to be sold in the market,” he said.

Due to the cautious sentiment, window dressing activities are only expected to commence later this month. — Bernama