KUALA LUMPUR, July 31 — Foreign capital that exited Malaysia after the general election are returning to the local market and set to provide an infusion for blue chip counters, according to a Bloomberg report today.
The business news service said the return would be a major fillip for Bursa Malaysia that is still the region’s worst performer of the year and receded another 0.8 per cent today.
Major funds withdrew from Malaysia following the upset result of the 14th general election, taking out over US$3 billion (RM12.4 billion) from the local market since May 2019.
Assuaged by the returning stability in the government and Malaysian political scene, they have slowly been making their way back, bringing along with them US$61 million this month alone.
“We are pretty positive for the second half,” Danny Wong, who oversees RM1.6 billion in assets under management, told Bloomberg.
Wong added that he is expecting strong results from firms with large market values but was less optimistic for smaller players, anticipating as much as a 10 per cent bump in the Bursa Malaysia by the end of this week’s trading.
Manulife Asset Management (HK) Ltd fund manager Kenglin Tan expects the Malaysian economy to keep stabilising as the new government continues to “find its footing”, saying the historic constitutional amendment to lower the voting age this month was a convincing development for market watchers.
However, Rob Mumford at GAM Investments remained downbeat about Malaysia’s prospects, believing the country to still be vulnerable to the continuing US-China trade tensions.
The government is maintaining a growth target of nearly 5 per cent for the local economy this year but some, including the Malaysian Institute of Economic Research (MIER), have lowered their forecast to around 4.5 per cent for 2019.