Overseas investors turned net sellers of Malaysian stocks in July for the first time in four months, as the Southeast Asian nation’s stock market continued to lag behind regional peers, CIMB Investment Bank Bhd said. Foreign funds unloaded US$121 million of Malaysian shares in July, the equivalent of 56 per cent of the previous three months’ inflow, CIMB analyst Terence Wong said, citing EPFR Global, which collects data from more than 600 foreign funds.
The reversal of fund flows is an “unwelcome surprise for us” and the outflow was “relatively steep,” he said in the report. “ All its regional peers enjoyed foreign fund inflows in July.” The benchmark FTSE Bursa Malaysia KLCI Index has risen 34 per cent this year, trailing behind Southeast Asian benchmark indexes. Neighbouring Indonesia’s gauge has jumped 75 per cent. Prime Minister Datuk Seri Najib Tun Razak, who took office on April 3, has announced stimulus plans valued at RM67 billion to revive economic growth.
Najib on June 30 announced his biggest overhaul of the financial markets, scrapping the need for overseas companies and for publicly traded Malaysian businesses to reserve 30 per cent of their equity for local ethnic Malay investors. Lack of Interest The key stock index fell 0.3 percent to 1,170.96 as of 11:51 a.m. local time, the first drop in four days.
Foreign funds “lightened” their holdings in stocks such as Genting Malaysia Bhd, Digi.Com Bhd and PLUS Expressways Bhd, he said. Funds added to weightings in banks including Public Bank Bhd, Malayan Banking Bhd and RHB Capital Bhd, he said. “Malaysia’s lower liquidity and velocity could be a symptom or cause, of foreign investors’ lack of interest in the market,” Wong said.
“The net selling could be a temporary hiccup that is consistent with past trends where it was relatively rare for foreign funds to be net buyers for more than three months running.” Wong maintained his “overweight” rating on Malaysia and his year-end index target of 1,220 points. -- Bloomberg
About Me
- Nuang
- Ibrahim bin Ramli@Nuang started his career with CIMB Wealth Advisors Berhad as Agency Manager in April, 2008.Previously he was an Internal Auditors and Accounts Executive with Perodua Sales Sdn Bhd since 17 August, 1994. His background:- 1.Certified of Achievement for Master Sales Leadership from Dr Lawrence Walter Ng of President of The Art Of Learning and International Of Learning Without Learning 2.Certified for eXtra Ordinary Performance of Lawrence Walter Award Certificate for One Million Ringgit Club 2007 3. Certified Life & General insurances 4. Conferred with Diploma in Business Studiess & Bachelor of Business Admin(Hons)Finance from UiTM, Terengganu Branch & Shah Alam respectively;
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