KUALA LUMPUR: Foreign investors were net sellers in the Malaysian equity market, withdrawing RM18.8 million between Monday and Thursday, compared with RM263.5 million recorded during the previous week.
This is the second consecutive week foreign investors sold Malaysian equities, said Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid.
“Despite the outflow, the FBM KLCI surpassed its previous resistance level of 1,700 points and the next resistance level is at 1,746.15 points.
“The key thing to watch for (going forward) is corporate earnings,” he told Bernama.
Mohd Afzanizam said February’s business sentiment, as indicated by the latest Manufacturing Purchasing Manager’s Index, for the United States, Eurozone, Germany and Japan fell to 53.7 (Jan: 54.9), 49.2 (Jan: 50.5), 47.6 (Jan: 49.7) and 50.3 (Jan: 48.5), respectively.
“As such, corporate earnings may experience robust growth this year,” he said.
Another analyst said the foreign outflow continued as investors were more cautious of the ongoing trade discussions between China and the United States.
“As the March 1 deadline is just around the corner, cautious sentiment clouded the market as worries heightened for a positive conclusion of trade talks,” he added.
Meanwhile, Phillip Capital Management senior vice-president (investment) Datuk Dr Nazri Khan Adam Khan said the cordial diplomatic ties between Malaysia and China should help reach a win-win negotiation for the East Coast Rail Link (ECRL) and cap any temporary weakness in the local equity market.
He said strong economic cooperation between Malaysia and China has resulted in both countries resuming talks to reach an amicable outcome on the project and any positive outcome would boost the infrastructure sector, as a direct result of growing confidence among local and foreign investors.
Besides, the offer by a Chinese bank to issue Panda bonds in China for Malaysia was a positive sign that foreign countries and foreign investors were confident with the new government.
Finance Minister Lim Guan Eng said the level of interest and confidence shown by foreign countries in providing loans to Malaysia was at a level never seen before.
As for the ringgit’s outlook, Nazri Khan said the local note was expected to be range bound between 4.05 and 4.00 against the US dollar next week, boosted by mild buying.
On Wednesday, the local note surged 140 basis points or 18 per cent to 4.0640/0700 against the US dollar from 4.0780/0830 on Tuesday, the highest level seen since Aug 1, 2018 when it touched 4.0640/0680.
“Steady crude oil prices, positive market sentiment in Malaysia and optimism over US-China trade talks pushed the ringgit to finish at its highest level in more than six months,” said Nazri Khan.
For the week just-ended, there were several major announcements including the appointment of Jefferi M Hashim as CIMB Investment Bank Bhd chief executive officer (CEO), effective March 1, and Muzmi Mohamed who was appointed (CEO) of TH Plantations Bhd, effective Feb 11.
Meanwhile, Tenaga Nasional Bhd has extended the service of Tan Sri Leo Moggie as the non-independent non-executive chairman of the utility company for another year, effective March 2, 2019.
The Employees Provident Fund (EPF) announced a dividend rate of 6.15 per cent for conventional savings, with a payout amounting to RM43 billion, and a 5.9 per cent dividend for shariah savings with a payout amounting to RM4.32 billion for 2018.
Chairman Tan Sri Samsudin Osman was quoted as saying that equities continued to be the main contributor of income with 57.55 per cent, amounting to RM29.28 billion, despite recording a slight decline of 6.96 per cent, compared with RM31.47 billion in 2017. – Bernama
