“There shouldn’t be any capital outflow. In fact, we are seeing some improvement in the capital markets now,” Awang said.

He added that the state election is a temporary event, and would not have any long-term adverse effect on capital flows or the market’s performance.

On the other hand, the former deputy finance minister feels confident that market sentiment will remain positive in the near future.

“The federal government is currently steady and intact as this is only a state election, and not a parliamentary one. We will continue to do our work as usual,” he said during a press conference at the commencement of the InvestED leadership programme at the Asia School of Business (ASB) today.

In a report today, RHB Investment Bank Bhd stated that it anticipates consistent net capital outflows from the local equity market starting from the latter half of August.

“Historically, from the empirical evidence, we notice net capital inflows into the domestic equity market as domestic elections approached.

“Subsequently, as elections culminate, these capital inflows would then reverse their course,” said its group chief economist Sailesh Jha.

Sailesh added that this trend can also be observed from the relationship between the USD/MYR and election cycles.

He mentioned another important catalyst which is the 10-year US Treasury bond yield.

“As 10-year US Treasury yields rise to around 4.4% in the next few months, we are likely to observe net capital outflows from emerging equity markets,” he said.

The InvestED is a flagship capital market graduate programme led by SC. It comprises a one-month comprehensive learning module, followed by a six-month on-the-job training with programme partners from the capital market industry.

Over 2,000 applications were submitted for the leadership programme’s first cohort, according to SC.