Bursa Malaysia’s performance is expected to recover when the global interest rate environment is more stable, subsequently drawing renewed interest and foreign fund inflows into this region, said Bursa Malaysia Bhd chairman Tan Sri Abdul Wahid Omar.
He said Malaysia saw net foreign fund outflows of RM4.2 billion in the first half of 2023 following the interest rate differential between Malaysia and the United States (US), which prompted investors to increase holdings of safe assets during a period of global economic uncertainty.
Bursa Malaysia recorded foreign fund inflows of RM4.4 billion amid a stable condition last year.
“Malaysia’s stock market is not the only one affected, other markets were also not spared. Thailand (market) is even worse.
“Like I said, investors must focus on fundamentals. When the economies in the US, Europe and the United Kingdom are more stable, they will not raise their interest rates further, and this would cause the flow of funds back to the emerging markets,” he told reporters at the listing of SkyWorld Development Bhd here, today.
Abdul Wahid said, at below 1,400 points, the FTSE Bursa Malaysia KLCI (FBM KLCI) is only trading at around 12 times price-to-earnings (PE) multiple.
“This is lower compared with the historical PE of 16 times. So again, look at the long term, address the fundamentals, after all we are investing for the medium and long term and it would come back,” he added.