Bursa Malaysia Bhd chairman Tan Sri Abdul Wahid Omar expects foreign shareholdings' level in the local bourse to improve in the second half of this year, underpinned by the attractive valuation of the listed equities and the country's solid economic fundamentals.
Speaking at a press conference after announcing the exchange’s second-quarter (2QFY2023) results, Abdul Wahid said the current valuation of the local equity market remains attractive and presents opportunities for investors, including foreign investors, to reap benefits from the potential upside.
Abdul Wahid’s optimism also takes cue from the prospect of peaking interest rates globally, which will likely benefit emerging markets like Malaysia, as this would draw renewed interest and foreign fund inflows to this region.
“As interest rates peaked in the US and UK, Europe and other developed economies, towards the end of this year, we are beginning to see a reversal of the flows coming back to emerging markets. For the month of July, we have seen RM1.1 billion of net inflows, therefore lowering the net outflow for the year to about RM3 billion. As foreign investors come back into our market, we expect foreign shareholdings to increase from the current 20% level,” said Abdul Wahid.
