KUALA LUMPUR, Nov 26 — The ringgit opened flat against the US dollar today despite the optimism over US-China trade talks, as investors remained edgy on the persistent foreign fund outflows on Bursa Malaysia.
At 9am, the ringgit was quoted at 4.1770/1820 against the greenback from Monday’s close of 4.1770/1800.
MIDF Amanah Investment Bank Bhd Research said foreign investors disposed of RM187.2 million net of local equities last week compared to RM408.5 million net sold in the preceding week.
The foreign selling made the year-to-last Friday’s foreign fund outflow amounted to RM9.17 billion, making up 78.4 per cent of last year's total foreign outflow of RM11.69 billion, the research house said in a note.
AxiTrader chief Asia market strategist Stephen Innes said the lack of a viable non-deliverable forward market made it challenging for foreign investors to hedge year-end currency exposure, leading them to feel more comfortable buying other regional assets where year-end currency risk is more accessible to manage.
"Besides the uninspiring moves on the ringgit, it was very depressing for local investors that the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) was unable to regain the 1,600 level, as risk looked very favourable to start the week," he said in a note today.
At the opening bell, the FBM KLCI was 1.71 points weaker at 1,589.64 from Monday's close of 1,591.35.
Touching on the political front, Innes said the succession of power between Prime Minister Tun Dr Mahathir Mohamad and PKR president Datuk Seri Anwar Ibrahim remained one of the most significant issues which kept investors guarded while taking on safer bets.
"Political uncertainty into year-end keeps investors nervous while taking on less risky regional bets," he said.
At the opening, the ringgit was traded mostly higher against other major currencies, except against the pound.
It rose against the Singapore dollar to 3.0592/0640 from 3.0603/0629 on Monday, advanced against the Japanese yen to 3.8304/8353 from 3.8367/8405 yesterday, and improved against the euro to 4.5985/6044 from 4.5993/6043 yesterday.
Vis-a-vis the pound, the local unit slid to 5.3871/3939 from 5.3804/3847 on Monday. — Bernama
