The Malaysian ringgit is nearing a seven-month high as demand emerged among foreign institutional players to buy the local currency to trade on Bursa Malaysia and bond markets.
The unit briefly touched 3.9910/9970 at 3.00pm for the first time this year. It last tested 3.9600/9630 on Aug 11, 2015.
A dealer said the ringgit was trending higher boosted by rising crude oil prices and improved sentiment on equity and bond markets.
MIDF Amanah Investment Bank Bhd head of research Zulkifli Hamzah said the gains were expected as there was a strong inflow of foreign funds into the equity market.
“Net foreign buying on Bursa Malaysia has extended for the sixteenth consecutive day,” he told Bernama, adding that the local bourse has attracted more external portfolio capital than its peers.
“The return of optimism has been very strong since the beginning of March,” he added.
Zulkifli said, the upward momentum looked sustainable as oil prices remained resilient coupled with the fact that offshore non-deliverable forward markets were bullish on the ringgit.
“The window of opportunity for foreign funds to enter the local equity market is still open even after relatively heavy buying in March. Foreign shareholdings in Malaysian stocks are still low, maybe less than 23 percent,” he said.
He, however, pointed out that the ringgit was still severely misaligned relative to its fundamentals.
- Bernama
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