The tide appears to be turning for Malaysian stocks as the biggest exodus of global funds since 2015 dissipates.
Overseas investors poured a net $84 million into the nation’s stocks last week, the most since late January, Bloomberg-compiled data show. The FTSE Bursa Malaysia KLCI Index has clawed back about half of this year’s more than 5% loss that had made it the world’s worst major market. Areca Capital Sdn. says it’s time to buy, and company earnings are unlikely to get any worse.
“There is a bottom in earnings downgrades if you look at results, too-low expectations and low base,” said Danny Wong, chief executive officer at Areca Capital Sdn. “We started to nibble in stocks two weeks ago after raising cash since the start of the year,” he said. Wong has been buying stocks with exposure to glove makers and companies tied to consumer and digital services.
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