Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng pointed out that the fundamentals of the Malaysian economy were still strong while his counterpart at MIDF Research Imran Yassin Md Yusof said the decline would not have significant implications  nor provide insight into foreign investor confidence.

They were commenting on the decline in foreign shareholding on Bursa Malaysia to 7.8% in September, the lowest ever.

Thong attributed the decline to the rise in interest rates in the US. “That has led to investors moving their funds to their US market,” he told FMT Business.

“This is also the reason for the fall in the value of the ringgit, as it is for other currencies,” he added.

Thong said the rise in the value of the US dollar against other currencies such as the ringgit would also raise production cost in the US, making it difficult for them to sell to other countries.

“But it will be easier for Malaysia to export its goods given that the ringgit will be cheaper,” he added.

Imran pointed out that as of Tuesday, there had been a net inflow of RM6.57 billion in foreign funds to Bursa Malaysia in 2022.

He noted that foreign ownership in Malaysian securities, based on market capitalisation, was at 20.6% in September, up from 20.1% in the previous month.

“Yes, we saw a net outflow of RM1.6 billion from Sept 13 to Oct 3, but it must also be noted that this coincided with the US Federal Reserve federal open market committee meeting when they surprised the market with their hawkish language,” Imran told FMT Business.

“My view is that this outflow was due to external factors rather than any domestic development,” he added.