KUALA LUMPUR: Local institutions continued to support the Malaysian equities market this week, pumping in RM253.53 million on stocks, compared with RM230.67 million last week.
The local institutions dominated 41.36% of trading during the week, with the rest taken up by foreign investors (41.17%) and local retailers (17.275).
Foreign investors remained net sellers, recording outflows of RM236.19 million during the week, against RM252.98 million last week.
Local retailers also reduced their shareholdings, shedding RM17.34 million, against inflows of RM22.31 million previously.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said there were positive signs of the emergence of value among banking and manufacturing stocks.
“The recent rating upgrade for Malaysian equities by HSBC and UBS has also lifted market sentiments,” he told Bernama.
Europe’s largest bank, HSBC, has upgraded its “Underweight” rating on Malaysian equities to “Neutral”, while Swiss financial giant UBS has placed a better rating of “Overweight” from “Neutral”.
UBS said Bursa Malaysia has displayed “defensive” qualities that could withstand an escalation in the US-China trade war.
It said Malaysia offers safety amid the current global environment, while HSBC said the country’s economy looks resilient, with domestic demand strong and manufacturing growth holding up.
Afzanizam said the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) has been performing well at above the psychological support level of 1,600 and posted a five-day winning streak despite volatile performance by its global peers.
“There is hope the FBM KLCI could sustain the current positive momentum as values may have emerged, which would entice foreign investors to come in,” he said.
Commenting on Prime Minister Dr Mahathir Mohamad’s statement last week that Malaysia is proposing a new currency based on gold, as opposed to the current currency trading which is manipulative, Phillip Capital Management, Asia-Pacific, senior vice-president (investment) Nazri Khan Adam Khan said it would make the ringgit more stable and allow it to become a self-regulated fixed asset.
It would pose a challenge for people to speculate in the currency or to push it up or down, he said.
“I think using gold as a standard is good as it will deter speculation. At the same time, it will give room to control inflation, which means the government can only print money as much as the gold, and keep inflation in check.
“I support this idea and hope it will be done in a manner that is fair to everybody. Give us (corporate players) some time,” he said.
In other developments, global oil prices fell sharply on Friday to their lowest in more than three months, weighed by worries over US President Donald Trump’s trade policy as well as a slowdown in Chinese economy, which has cast doubt on the outlook for global demand.
The benchmark Brent crude fell 2.6% to US$63.60 per barrel while the West Texas Intermediate dropped 2.4% cent to US$55.25 per barrel. - FMT
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