PETALING JAYA: Head of research Kenny Yee said that foreign funds will possibly make their way back to Malaysia by the third quarter of this year to take advantage of the current reasonable valuation and cheap ringgit, says online equity broker Rakuten Trade.
He said once these funds flowed in, it would be for the longer haul, playing their role in strengthening the ringgit, which is expected to improve up to RM3.90 against the US dollar by the year-end.
Malaysia has been the worst performer in the equities market within the region but Rakuten is of the opinion that the reversal of this might be sooner than expected, on the back of the revival and kick-starting of mega projects by the “more business-minded” Malaysian government.
Yee said the spillover effect from the mega projects into other sub-segments was very high and this would improve economic activity in Malaysia.
The net outflow of foreign funds from equities last year was RM11.64bil. Year-to-date, the net outflow is RM2.57bil.