KUALA LUMPUR: There is a very good reason why Bursa Malaysia is enjoying the longest equity rally in the world — its benchmark index FTSE Bursa Malaysia KLCI (FBM KLCI) has more than doubled from its 2008 lows.
Indeed, a confluence of positive developments has helped lift investor sentiment and ultimately, prices in the local bourse.
(The benchmark index yesterday closed at 1,718.40 points, down 5.89 points, or 0.34 per cent, from Thursday’s close. On a week-on-week basis, it gained 0.46 per cent from 1,710.55 on April 1).
The positives include the rebound in commodity prices and the ringgit versus the US dollar, further policy easing in Japan, Europe and China, and shifting expectations in the pace of interest rate increases by the United States Federal Reserve.
And more importantly, the return of foreign funds.
After two consecutive years of net selling by foreign institutional funds totalling RM26.5 billion, foreign funds have returned to domestic equity market with a bang in the past few weeks.
Analysts said the cumulative net buy reached RM6.1 billion as of last week, after a slow start to this year, with January’s net sell standing at RM975 million.
Drivers of foreign flows included a perceived undervaluation of the ringgit and Malaysia being seen as a safe haven and a low-beta market.
Malaysia had won the lion’s share of fund inflows into Asean so far this year, they said.
Against this rosy backdrop, top global investors who consider Malaysia’s stock market as the world’s most resilient bull market for stocks will again descent on Invest Malaysia 2016 (IM2016) to widen their investment picks.
Invest Malaysia — the country’s largest annual capital market event — will see corporates, policymakers, and investors congregate here for two frenetic days of conversations and pitching for the 12th time.
The two-day conference, which is jointly organised by Bursa Malaysia Bhd and Maybank Kim Eng Group on April 12 and 13, will showcase the growth and competitiveness of Malaysia’s marketplace to global fund managers.
At the heart of this most important capital market event is the assembling of Malaysia’s 55 most investable companies for the purpose of meeting 47 top global and regional fund managers.
These public-listed companies alone represent more than 50 per cent of the local stock market capitalisation, while the fund managers combined have a staggering US$11.18 trillion (RM43.67 trillion) of assets under-management.
Investors today look at returns and also increasingly at sustainable business practices when investing.
On this front, the FTSE4Good Bursa Malaysia Index is invaluable as it shows that sustainable practices not only reward shareholders, but also preserve the environment.
According to Bursa Malaysia, year-on-year growth of the FTSE4Good Bursa Malaysia Index has outpaced the FBM KLCI by seven to eight per cent.
Another key area investors look for when investing is companies’ growth prospects, and in response to this, Bursa Malaysia and Maybank Kim Eng are creating valuable conversations at the IM2016.
Malaysia’s participation in the Trans Pacific Partnership (TPP), the immense business potential from China’s push under the “Belt & Road” initiative (also known as One Belt, One Road), as well as the Regional Comprehensive Economic Partnership (RCEP) will be part of the conversations at IM2016, besides the all-important Sustainable Development Goals (SDG).
As these three initiatives (TPP, Belt & Road and SDG) could reshape and disrupt markets and businesses, Bursa Malaysia and Maybank Kim Eng have also invited 25 global thought leaders to discuss the opportunities and the paths forward for business leaders and regulators.
Malaysia is projected to grow bigger and stronger with its participation in these mammoth trade and sustainability initiatives, hence, the theme “Malaysia: Sustainable at the Core” for IM2016.
Prime Minister Datuk Seri Najib Razak is expected to officiate at IM2016 and deliver a special address on Malaysia’s game plan and vision for businesses.
Bursa Malaysia chief executive officer (CEO) Datuk Seri Tajuddin Atan said IM2016, in bringing investors, businesses, thought leaders and policymakers together, was designed to ignite conversations that matter most to “our businesses and our marketplace”, and key steps must be taken to enhance the conducive environment for companies to grow.
“Bursa Malaysia continues to build on our well-diversified marketplace and leverage the building blocks that we have put in place to create a sustainable marketplace.
“The next generation of competition is putting greater emphasis on our role as an exchange to ensure a more competitive marketplace and remain a model for other emerging markets,” said Tajuddin in a statement.
Maybank Kim Eng and Maybank Investment Bank CEO John Chong echoed the sentiment, noting that Malaysia was well-positioned to take advantage of the changing global landscape and higher order of trade.
“Malaysia continues to demonstrate resilience on the back of a well-diversified market, strong fundamentals and robust PLCs (public-listed companies) supported by a deep and flourishing capital market.
“The TPP will be a catalyst for broader economic reform and for corporates to transform their business practices to drive a more sustainable development,” said Chong.
As the world economy becomes increasingly borderless, he said, the TPP and the Belt & Road initiative would further accelerate the process.
As a result, Malaysian corporates needed to be ready to integrate with the global economy and seize opportunities as well as face the competitiveness of a much open global marketplace, Chong added.