KUALA LUMPUR: Foreign investors continue to look at the Malaysian stock market as an attractive investment destination in the region because of its corporate earnings prospects as well as stable economy.
So far this year, a total of RM2.9 billion net of foreign funds had been injected into Bursa Malaysia as of today (April 18), the highest among bourses in Southeast Asia.
The strong influx of foreign funds have also enable Bursa’s benchmark FBM KLCI to continue hovering at its highest levels in four years at 1,870 points.
Some analysts believe that the strong corporate earnings are on the back of investors confidence of the strong economic fundamentals.
There have only been two countries in Southeast Asia that have managed to attract net foreign fund inflows, the other country being Vietnam.
Vietnam was able to attract a total of RM1.6 billion year-to-date.
Indonesia, the Philippines and Thailand are experiencing foreign fund outflows from their stock markets.
MIDF Research analyst Adam Mohamed Rahim said that as of last Friday, a total of RM2.85 billion of foreign funds had flowed into Malaysia.
He stressed that the Malaysia was enjoying robust foreign funds inflows because of its political stability and lack of domestic terrorism, unlike some of its regional peers as outlined by a recent World Bank report.
He noted that the increase in foreign fund inflows had also helped the country's economy to grow 5.9 per cent last year, the highest since 2014.
“Private investments have also increased the gross domestic products (GDP) growth to 26 per cent in 2016, in comparison to 23.4 per cent in 2010,” he told NST Business.
“This is different from Thailand which have been showing a slow down.”
According to data provided by MIDF Research, foreign investors had been buying into local stocks in the last 12 weeks.
The participation of foreign and retail investors had been strong last week with investments reaching over RM1 billion.
AmBank Research said the local stock market will continue to gain benefits from the country’s strong economic fundamentals.
The firm added that Malaysia’s economic growth will also be supported by strong local recovery and stronger ringgit.