How Malaysia's stock exchange is attracting foreign investors and encouraging more trading
By Ankur Banerjee
SINGAPORE - Malaysia's stock exchange is making moves to loosen the control of large domestic investors to boost trading and attract more foreign investors to Southeast Asia's best performing bourse. Kuala Lumpur's benchmark index has seen a 15% rise in 2024, marking its strongest yearly performance in over a decade. This growth is fueled by improving economic conditions and a strengthening currency, drawing foreign investors back to the market.
Bursa Malaysia's CEO Muhamad Umar Swift stated that there is a shift in liquidity towards Malaysia from other Asian markets. Foreign investors are particularly interested in technology stocks and are seeking higher liquidity. To cater to this demand, the exchange is working to increase free float by engaging institutional shareholders.
Despite the influx of foreign capital, Malaysia still has room for growth, with only 38% of global emerging market funds currently invested in the country. The market cap exceeds $460 billion, and recent listings have raised $1.3 billion, indicating a positive outlook for the Malaysian market.
One notable upcoming listing is 99 Speed Mart Retail Holdings, set to debut at $509 million - the largest listing in seven years. Investors are taking notice of Malaysia's potential, with portfolio managers like Vivian Lin Thurston from William Blair's emerging markets growth strategy showing renewed interest in the country.
Overall, Malaysia's stock market presents a promising opportunity for investors looking for growth and diversification in their portfolios.
Analysis: Malaysia's stock exchange is experiencing a resurgence, driven by strong economic fundamentals and increased foreign interest. The push for more liquidity and higher free float is attracting investors and boosting trading activity. With a growing market cap and a healthy pipeline of listings, Malaysia presents a compelling investment opportunity for those seeking exposure to emerging markets.
