KUALA LUMPUR, Jan 7 (Bernama) -- The FTSE Bursa Malaysia KLCI (FBM KLCI) recovered from yesterday’s losses to close higher Tuesday, driven by bargain-hunting amidst the positive momentum on Wall Street overnight and most regional markets. At 5 pm, the market bellwether increased 4.32 points or 0.26 per cent to 1,629.79 compared with Monday’s close of 1,625.47. The index opened 0.97 of-a-point lower at 1,624.50 and moved between 1,624.50 and 1,634.27 throughout the day. However, the broader market was negative with losers outpacing gainers 614 to 490, while 537 counters were unchanged, 712 untraded and 10 others suspended. Turnover improved to 3.91 billion units valued at RM3.29 billion against Monday’s 3.47 billion units valued at RM2.66 billion. UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan said optimism in the...
Nomura Holdings Inc. has advised investors to reduce their holdings in Chinese equities and redirect their investments towards Indonesia and Malaysia. The move is based on the view that these Southeast Asian markets will benefit more from anticipated cuts in US interest rates. As part of this strategy, Nomura has upgraded Malaysian and Indonesian stocks to 'overweight' from 'neutral,' while downgrading MSCI China to 'neutral' from 'overweight.'
Key Takeaways:
Rationale for the Shift: Nomura's strategists, led by Chetan Seth, believe that Indonesian and Malaysian markets are better positioned to capitalize on the expected US interest rate cuts. This shift comes amid rising interest from foreign investors in these markets, which are seeing a second consecutive month of inflows.
Chinese Market Concerns: China's equity markets have struggled recently, with the MSCI China index down around 3.6% since the end of May. Concerns over China's faltering economy, ongoing real estate slump, and geopolitical tensions with the US have weighed on investor sentiment.
Positive Outlook for ASEAN Markets: Nomura's analysts see Indonesia as "possibly the best way" to bet on a revival in emerging-market stocks as the US Federal Reserve begins to cut rates. The shift reflects a broader optimism about Southeast Asia's economic resilience and growth potential.
Historical Success of Nomura's Picks: Investors may take Nomura's recommendations seriously, as the bank's strategists previously upgraded Taiwanese equities in December, which has resulted in the Taiex Index rising by around 25% this year. This contrasts with the more modest gains seen in other Asian markets.
Foreign Investor Activity: In August, overseas funds purchased $874 million in Indonesian stocks and $240 million in Malaysian shares, reflecting growing confidence in these markets.
Nomura’s decision to pivot away from Chinese equities towards Indonesia and Malaysia highlights the ongoing challenges facing China’s stock market and the emerging opportunities in Southeast Asia, particularly in the context of expected changes in US monetary policy.
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