KUALA LUMPUR: Net inflow into the country stood at RM479.6 million as of Jan 24, surpassing last week’s total net inflow of RM471.3mil while foreign institutional funds turned net buyers pumping in RM293mil versus RM417mil recorded the previous week, say economists.

These positive developments suggest that values have emerged among Malaysian stocks at a time when interest rate hikes have tapered down in the United States, said Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid.

“The week started off on a weak note. China’s sluggish economy in the fourth quarter of 2018, global growth forecast revision by the International Monetary Fund (IMF) and the lingering effect from the long drawn out discussions between the United States and China as well as UK Brexit left the market with much uncertainty,” Mohd Afzanizam told Bernama.

He said at the current juncture, the FTSE Bursa Malaysia KLCI (FBM KLCI) was lingering around the immediate resistance level of 1,700 points although it attempted to breach the resistance level especially in the early part of the week.

“For next week, we can expect the market to remain timid in the absence of progress on the Brexit front, trade negotiations between the US and China as well as the Federal Open Market Committee meeting on Jan 30 which will be closely watched by the market,” he said.

Meanwhile, Inter Pacific Research Sdn Bhd head of research Pong Teng Siew said emerging markets saw renewed interest from international investors after the US Federal Reserve decided to slow the pace of interest rate hikes while the uncertainty over Brexit was benefitting other regions.

Pong said the pattern of fund flow into the country’s equity market was different this week with more interest emerging for small and mid-cap counters as opposed to big-cap and index-linked stocks in other markets in the region.

“Surprisingly, the FBM KLCI benefitted less than other regional markets but the fund inflow was encouraging and managed to push up small and medium-cap counters,” he said.

Pong added that the uncertainty over Brexit also led to investors shifting their investment to emerging markets.

Another analyst, Putra Business School senior lecturer and manager for business development Dr Ahmed Razman Abdul Latiff echoed Mohd Afzanizam and Pong’s views that movments on Bursa Malaysia was lacklustre as investors were very cautious awaiting the outcome of US-China trade talks at the end of this month.

“Crude oil price remained stable, hovering around US$60 per barrel while the ringgit weakened further to RM4.14, which could help boost export.

“Bank Negara’s decision to maintain the overnight policy rate at 3.25 per cent will also help reduce uncertainties in the market,” said Ahmed Razman. — Bernama

Source: https://www.thestar.com.my/business/business-news/2019/01/28/malaysias-net-inflow-increases-to-rm480mil/#aodY2q7iiUAZXZAj.99