Foreign bond outflow concerns remain after FTSE Russell decision, AmBank Research says

AmBank Research said nonetheless, it was maintaining its end-2019 FBM KLCI target at 1,680 based on 17 times its 2020F earnings projection (+7.6%), which is at a discount to its five-year historical average of about 18 times.

KUALA LUMPUR: Stock market indices provider FTSE Russell’s decision to retain Malaysian bonds on its FTSE World Government Bond Index (WGBI) watch list is negative to the market, AmBank Research says.

“The next review will only be due in March 2020. This is negative to the market as it means the overhanging concern on potential US$8bil (RM33.6bil) foreign outflows from the Malaysian bond market in the event of a downgrade will not immediately go away, ” the research house said on Friday.