IT is not too far fetched to say that the local bourse is rather fixated with the flow of foreign fund net outflows and that has actually been one of the key reasons for the market’s underperformance.
IT is not too far fetched to say that the local bourse is rather fixated with the flow of foreign fund net outflows and that has actually been one of the key reasons for the market’s underperformance this year mainly due to missed earnings expectations as well as rich valuations.
In fact, the monies in and out of the local bourse are just one signal as to where FBM KLCI could be headed in the near term as the correlation of these flows seem to suggest so. In Chart 1, we could conclude that the annual flow of funds from foreigners has been a key determinant factor in the performance of the FBM KLCI for the past six years.
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