FOREIGN investor interest in the KLSE has been on an upward trend and accounted for a third of all trading on the exchange last year, its executive chairman Datuk Mohd Azlan Hashim said.
He said the significant international participation in the KLSE, currently Asean’s largest in terms of market capitalisation, was a good indication of the attractiveness of the Malaysian capital market. In terms of volume, international trading activity had been on a rising trend since 1999, he added.
Azlan told the 4th annual Malaysian Capital Markets Conference in Kuala Lumpur yesterday that international trading on the local bourse last year accounted for RM84bil or 32% of the total trading volume of RM261bil.
He said that as at end-2002, foreign investors collectively held 18% or RM87bil worth of shares listed on the KLSE out of a total market capitalisation of RM480bil.
Consequently, investor participation in the KLSE was “commendable and well balanced” given the combination of local and foreign investors in the stock market.
“One of the attractions of our market is that it is a diverse, vibrant and growing market that has responded positively to the test of time,” he added.
Azlan said that in terms of investment choices, the KLSE hosted the largest number of listed companies of all the stock exchanges in the Asean region. As at July 18, there were 878 companies listed on the exchange representing 15 sectors.
“Total market capitalisation of the KLSE was RM561bil, making it the largest market in Asean and representing an almost four-fold increase since 1990,” Azlan said, adding that large companies accounted for a sizable portion of those listed.
He said that of the 878 listed companies, 162 had market capitalisations exceeding RM500mil while 19 had market capitalisations of over RM5bil.
Making the point that investing in the stock market was still an attractive proposition, Azlan said more than 42% of KLSE-listed firms were trading below their audited net tangible assets, “making these companies very attractive to investors.”
He said the KLSE Composite Index (CI), which had gained more than 10% so far this year, had improved consistently with positive local and global developments. Trading activity had also surged, with average daily volumes in July to date of 853 million units valued at RM1.29bil compared with an average of 284 million units worth RM472mil during the first six months of the year.
Government measures to enhance market liquidity in March, complemented by the economic package and the standardisation of board lots to 100 units in May, had contributed to this positive development, he said.
The one-day conference attended by representatives from the Malaysian financial services industry and regulators was organised by FinanceAsia magazine.