KUALA LUMPUR, Aug 31 — Global investors are increasing their investments in Indonesia and Malaysia, betting that these markets will gain more compared to other emerging economies as the Federal Reserve appears poised to implement monetary easing.reported that robust fiscal policies and a focus on emerging technology sectors like electric vehicles and data centres are drawing investment to Indonesia and Malaysia.
“Malaysia is looking more interesting than it has in a long time,” Vivian Lin Thurston, a fund manager at William Blair Investment Management in Chicago, was quoted as saying. Global investors have also purchased US$1.8 billion in Indonesian shares, the largest amount since April 2022, following significant buying in July. This surge has driven the Jakarta Stock Exchange Composite Index to achieve consecutive record highs recently. Bond inflows into Indonesia are projected to reach their highest level since January 2023, based on data up to August 28.
However, risks still remain. In Malaysia, a sudden reversal in the AI sector, similar to the volatility seen in early August, could lead to market fluctuations. In Indonesia, investors closely monitoring the country’s leadership transition as they seek assurance of policy continuity under President-elect Prabowo Subianto. Additionally, the US election presents a potential risk for Asian assets, with any increase in geopolitical or trade tensions likely to affect investor sentiment.