Risk off market sentiment in China to benefit Bursa

RHB Global Economics and Market Strategy believes international investor sentiment towards Malaysia, from a tactical perspective, is turning towards allocating capital to the equity market and away from the local currency government bond market.

KUALA LUMPUR: The recent risk off market sentiment in China associated with regulatory tightening in specific sectors, slowdown in credit growth, and downside surprises of macro data, is positive for capital flows to the Malaysian equity market in the near-term, RHB Global Economics and Market Strategy said.

“The recent domestic political developments in Malaysia do not significantly impact these capital flow dynamics since we expect Malaysia 5YR CDS to temporarily hit around 52-53 and then retrace quickly as the new administration forms the government.