Malaysia is the biggest gainer of fund inflow in the region
KUALA LUMPUR: Malaysia is the biggest gainer in terms of the inflow of foreign funds in the region due to the country’s strong fundamentals and the valuation of the companies here, said Bursa Malaysia.
“On the inflow of funds to South-East Asia, we are the biggest gainers, simply because of our fundamentals and the valuation of the companies in Malaysia seems to be at a good level for them to enter.
“They (investors) left and they came back. When the smart money comes back, they find the best fundamentals and the best returns in terms of dividend yields.
“But, of course, you will still see some trading because there are many factors to be considered,” said chief executive officer Datuk Seri Tajuddin Atan.
He said the Malaysian economy and businesses were backed by strong fundamentals.
“The last 18 months, we saw an exodus or a lot of movement of foreign funds outside the country and to a certain extent, they have come back,” he said.
Speaking to reporters on the sidelines of the 12th Invest Malaysia (IMKL2016) conference here yesterday, he said although it may seem that the foreign funds were mostly coming from the Asean region, this might not necessarily be the case.
“It depends where you look at. The debt capital market and equity capital market are two areas that are growing well. Domestic funds seem to be very familiar with us and they are the first to come in.
“But the Asean funds, some of them may be seen as coming in from Hong Kong, or through Singapore. Funds from outside Asia pass through this conduit, because Hong Kong and Singapore are financial centres.
“Funds from outside come either directly to us or through this conduit,” he said.
Foreign net inflows to Malaysian equities totalled RM5.6bil for the three months to March 2016.
Foreign shareholdings accounted for 23% of Malaysia’s market capitalisation of RM1.7 trillion as at end-March 2016.
Last year, Malaysia registered a total net outflow of RM19.4bil, with foreign shareholdings standing at 22.3% of its market capitalisation.
Tajuddin said he believed that this trend of fund inflows could be sustained
“But we must remember that the main assumptions are – that the market is still volatile, it is still cyclical – that remains the same.
“But this trend, to me, will remain and hold. I believe it will go up, it may not be a spike but it will continue to grow,” he said.
Tajuddin said IMKL2016 had seen the largest turnout ever, with an estimated 2,400 people.
“The key theme this time is ‘Sustainable at the Core’.
“That is what Invest Malaysia is all about.
“It is about sustainability and we also want to emphasise that our market is resilient,” he added.