Big is beautiful in Malaysian stocks as foreign funds return

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While more than US$3 billion has left the nation since the election in May last year, overseas funds have been returning to buy a net of US$61.4 million Malaysian stocks in July. FMTNews

An index of the nation’s small stocks has gained 20% this year compared with a 3.6% decline in the FTSE Bursa Malaysia KLCI Index tracking the biggest 30 companies.

Investors from Manulife to Areca Capital expect Malaysia’s large firms to benefit from clearer policy direction after a year of public reforms and project reviews. The benchmark KLCI could gain about 10% from Friday’s close, he said, adding that “large caps would do good in the second half, even if small ones don’t.”

The near-unanimous vote to pass a bill on the minimum voting age shows that “the investment case is becoming more attractive,” Tan said, adding that he’s been adding to his holdings of the country’s stocks.

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