Bloomberg News

Foreigners Bought Malaysian Stocks in October, Bursa Says

November 02, 2011

(Updates with investor comment in fourth paragraph.)

Nov. 2 (Bloomberg) -- Overseas investors bought Malaysian stocks in October after two months of outflows as the benchmark index capped its biggest monthly gain in more than two years.

Foreign funds purchased a net 1.5 billion ringgit ($480 million) of Malaysian shares last month, according to data on the Kuala Lumpur stock exchange’s website. Foreign investors sold 300 million ringgit of stocks in September and 3.8 billion ringgit in August, after four consecutive months of net buying.

The benchmark FTSE Bursa Malaysia KLCI Index advanced 7.6 percent in October, the first gain since June and the steepest since July 2009, as concerns eased that Europe’s debt crisis will hurt growth and erode demand for emerging-market assets. Still, speculation that a Greek referendum will threaten Europe’s rescue plan may prompt investors to sell Malaysian equities, said Ang Kok Heng, who oversees $292 million as chief investment officer at Phillip Capital Management Sdn.

“Foreigners were happily buying in October as there were less worries about the European problem,” said Ang. “Now markets have become jittery over the Greek referendum, which may cause foreign investors to change their minds in investing here.”

European Union leaders will hold emergency talks on the eve of the Group of 20 summit beginning tomorrow in Cannes, France, where they will tell Greek Prime Minister George Papandreou there is no alternative to budget cuts imposed in a bailout plan hammered out last week.

The KLCI index fell 0.8 percent to 1,464.50 at the 12:30 p.m. break in Kuala Lumpur today, heading for a second day of losses.

--Editors: Matthew Oakley, Allen Wan

To contact the reporters on this story: Chan Tien Hin in Kuala Lumpur at thchan@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net


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