Sunday, March 20, 2011

Bank of America Report : Malaysian Stock Market no very popular among foreign investors?

One piece of News which Caught my Eye this Week

Full report here :

"Malaysia remains among the least popular markets for both global emerging market (GEM) and Asia-Pacific (AP) fund managers and suffered up to 43 per cent cuts in fund allocations, said a report by Bank of America Merrill Lynch (BoAML) released this week.

In its March report, Malaysia retained its February rating as second least popular market after Columbia among GEM fund managers and is now tied with India for least-favoured among AP fund managers, after coming ahead of the South Asian nation in the February survey."

Unfortunately, the Malaysian Market is not faring too well in the foreign investor arena. We are down there with India. The similarities are similar? Are not both our countries heavily dominated by government linked companies. This also goes to explain the recent sell off in foreign owned stocks which would include MEGB.

"Malaysia has traditionally been perceived by regional fund managers as a defensive and unexciting market, lacking in liquidity and dominated by government-linked institutional funds."

Perhaps, time to diversify outside or just a general fear over the impending government elections?

I personally think that the reason is the returns in other markets are better and will the foreign funds be back? Yes, the hot money may be back and it will take more than roadshows overseas but well, performing fundamentally strong companies with good, transparent corporate governance to get more long-term foreign investors in.

Will Malaysia take the tougher measures needed to make these changes? Hard la. Election year is coming so time for dress-shopping, not the hard but necessary measures needed. *sigh*

Full Disclosure: Yes, I have a position in MEGB.

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