Who is really participating in FBMKLCI?
Since Jan 2015, what is quite obvious – retail investors have been shying away from this market. It’s like as if they are waiting at the sideline. Are they waiting for post-GE14?
Since Jan 2015, foreigners’ fund outflow peaked in Dec 16 (this could possibly attributable to certain negative credit perception of the country – http://www.theedgemarkets.com/article/moodys-malaysias-medium-term-goal-balanced-budget-2020-risk). Since then, there has been gradual inflow of foreigners’ funds. Nevertheless, the current cumulative net movements (since Jan 2015) remains in negative territory.
As widely reported, the market is very much supported by domestic local institutions (e.g local saving / pension institutions, local funds, etc).
Do we have ample domestic liquidity?
In view of ageing population / higher cost of living, we may anticipate higher rate of withdrawals from these savings / pension institutions in the near future. For example, we see higher withdrawal rate from one of the pension / saving institutional funds (shown below):
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