Capital inflow: Investors monitoring stock prices at a brokerage in Kuala Lumpur. On a year-to-date basis, foreign investors have bought RM10.8bil net from the open market.
PETALING JAYA: Asian stock markets were mostly higher, despite slower-than-expected growth in Indonesia, as investors stayed positive about the region’s economic outlook.
The benchmark FBM KLCI closed 3.38 points higher at 1,771.91 yesterday, continuing a momentum from last week albeit at a lower volume.
Sentiment in the market was also bolstered by Wall Street’s record-breaking performance. The Dow Jones Industrial Average’s rise last week above the 22,000-point level marked one of the longest bull markets in history.
Foreign investors continued to buy Malaysian stocks last week despite the selloff in regional peers, including Thailand and Indonesia, according to MIDF Research in a report.
Foreign investors bought RM151.2mil local equities, marking the fourth week of inflows.
The research house said Malaysia recorded seven consecutive months of inflow from overseas, with net purchase almost reaching the RM11bil mark.
On a year-to-date basis, foreign investors have bought RM10.8bil net from the open market. “This has offset approximately one-third of the cumulative outflow from 2014 to 2016,” MIDF said.
CIMB Group Holdings Bhd saw the highest net inflow of RM9.27mil last week, followed by Genting Bhd and Maxis Bhd.
Yesterday, small to medium-sized companies in terms of market capitalisation topped the volume list, which included Frontken Corp Bhd, Compugates Holdings Bhd, Dagang NeXchange Bhd and Jag Bhd.
Shares in Frontken closed 19% lower at 33 sen after hitting an intraday high of 42.5 sen.
Top gainers led by Hengyuan Refining Company Bhd saw a 34-sen jump to RM8.31, followed by Allianz Malaysia Bhd and Tasek Corp Bhd.
Key Asian markets closed higher, including the Nikkei 225, which added 0.52% to 20,055.89. The Hang Seng Index chalked up 0.46% to 27,690.36 points, South Korea’s Kospi rose 0.14% to 2,398.75 and the Shanghai Composite was up by 0.53% to 3,279.46.
Meanwhile, Singapore’s Straits Times Index fell 0.18% to 3,320.67, the Jakarta Composite Index eased 0.49% to 5,749.29, while Thailand’s SET went down 0.29% to 1,573.61.
The Indonesian economy grew 5% in April-June from a year earlier, slightly slower than forecast and unchanged from the first quarter’s pace.
“Weaker-than-expected second-quarter growth in Indonesia has increased expectations that Bank Indonesia may resume a rate cut,” UOB Group said in a note.
Templeton Emerging Markets Group chairman Mark Mobius tweeted last week that “valuations in emerging markets remain attractive relative to developed markets.”
In a recent blog, the renowned emerging-market investor said the first half of 2017 had been bright for emerging markets.
The MSCI Emerging Markets Index is up by 23.8% year-to-date as compared to an 12.4% gain in the MSCI World Index.
“The strong start to the year reflects an improved macroeconomic backdrop, following a period of currency and commodity price adjustments and widespread political change,” he said.
Mobius explained that although the emerging markets are still going through adjustment and rebalancing, there are more visible signs of robust economic conditions.
“Positive factors include low debt, stabilising commodity markets, reduced currency volatility and improving consumer confidence.
“The implementation of reforms in many countries has also been further driving market confidence,” he said.