Foreign funds returning to Malaysia, market capitalisation near all-time high

Bursa Malaysia chairman Tan Sri Amirsham Abdul Aziz speaks at the Invest Malaysia 2016, Kuala Lumpur, Tuesday, April 12, 2016. - RAJA FAISAL HISHAN/The Star.

KUALA LUMPUR: Malaysia is seeing a return of foreign funds to equities, with net inflows totalling RM5.6bil for the three months to March 2016.

“Foreign flows are back, market capitalisation is near all-time high,” Bursa Malaysia Bhd chairman Tan Sri Amirsham A Aziz said in his opening remark at the 12th Invest Malaysia (IMKL2016) conference here yesterday.

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.

“This compared with a total net outflow RM6.6bil in 2014, with foreign investors accounting for 24.3% of the country’s market capitalisation.

Highlighting the vibrancy of Malaysia’s equity market, which is represented by about 50 economic sectors, Amirsham said, “our FTSE4Good ESG Index continues to add new members and our syariah indices continue to outperform our benchmark index”.

To date, there were 34 companies participating in the ESG (Environmental, Social and Governance) Index that was launched by Bursa Malaysia 16 months ago.

This represented an increase of 42% in the number of companies participating in the index from 2015.

Meanwhile, the launch of the ESG Index for the five leading Asean markets had been unveiled at the IMKL2016 as announced by Prime Minister Datuk Seri Najib Tun Razak.

“I can share with you the rolling out of the new FTSE4Good Asean 5 Index, or the Asean ESG Index, which will mean that companies listed on the exchanges of Singapore, Indonesia, Malaysia, Philippines and Vietnam which meet the ESG standards will be eligible for inclusion,” Najib said in his keynote address for the the two-day IMKL2016 that had been jointly organised by Bursa Malaysia Bhd and Maybank Kim Eng.

The conference is the largest annual capital market event in Malaysia that serves as a marketplace for global fund managers.

This year, IMKL2016 featured 55 Malaysian companies that represented more than 50% of the country’s market capitalisation and about 47 global and regional fund managers with a combined assets under management valued at US$11.17 trillion (RM43.41 trillion).