RM138m in foreign funds flow into equity market


Foreign investors were net buyers in the Malaysian equity market, pumping in RM138.6 million between last Monday and Thursday, compared to RM146.8 million recorded during the previous week.

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the inflow of foreign funds was quite impressive despite external uncertainties.

“Perhaps, expectation that the US federal fund rate will reach a peak of 2.5% may have driven funds from abroad to look at emerging-market assets.

“Global prospects were also quite weak based on the recent Global Purchasing Managers’ Index for the manufacturing sector which fell to 50.7 points in January from 51.5 points in December 2018,” he told Bernama.

However, Mohd Afzanizam said the US labour market remained strong, following the release of better than expected non-farm payroll data for January coupled with higher wages which could prompt the US Federal Reserve to resume monetary tightening measures should inflation continue to rise.

“If that happens, it may have an impact on capital flow and currency markets,” he added.

Meanwhile, MIDF Research analyst Adam M Rahim said the month of January 2019 saw foreign net inflow of RM1.03 billion, the first monthly net inflow since September 2018.

He said weekly increase in average daily traded value, which jumped 21% to remain above RM1 billion for the second week running, was only evident among foreign investors.

For the just-ended holiday-shortened week, there were no major corporate announcements as the local market was closed for two days to usher in the Chinese New Year which fell on Feb 5.

Last Friday, the benchmark FTSE Bursa Malaysia KLCI ended 2.99 points higher at 1,686.52.

Phillip Capital Management Sdn Bhd senior VP (investment) Datuk Dr Nazri Khan Adam Khan opined that the small improvement in the fund flow indicated that Malaysia is catching up with other countries such as Indonesia, the Philippines and Thailand.

On Feb 8, Finance Minister Lim Guan Eng said international investors are confident in Malaysia’s economic potential as well as the government’s ability to drive the economy forward.

He said Malaysia remains an attractive investment destination with investors, especially with the government’s commitment to the competency, accountability and transparency principles under Prime Minister Tun Dr Mahathir Mohamad’s leadership. — Bernama