Foreign net inflow hits RM1b in Jan

KUALA LUMPUR: Malaysia’s equity market saw a net foreign inflow of RM1 billion last month following three straight months of outflows, while foreign holdings of equities edged up to 23.5 per cent from 23.4 per cent in December last year.

United Overseas Bank Malaysia (UOB) senior economist Julia Goh said last month’s renewed foreign inflow into equities came alongside a firmer ringgit and reversal in non-resident portfolio flows into emerging markets.

“We think the United States Federal Reserve’s (Fed) more dovish stance signalled patience for further rate hikes, suggesting that the Fed may keep rates on pause until June. This provides some respite for markets and initiates the hunt for yield.

“However, volatility is likely to persist driven by headlines and events against a backdrop of slower global growth and demand,” she said in a note yesterday.

On the ringgit’s outlook, Goh said it would likely range between 4.05 and 4.10 against the US dollar in the near term before a subsequent move towards 4.15 and 4.18 by mid- and end of the year, respectively.