KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
South Korea has made significant strides to get its bonds included in the FTSE Russell World Government Bond Index (WGBI), while India, despite slower reforms, has gained popularity with global investors, positioning it for potential inclusion in a related FTSE benchmark. FTSE Russell will announce any inclusions on Oct. 8, impacting the US$29 trillion global fixed income market.
South Korea has met all the requirements for WGBI inclusion after overhauling its currency and debt-market operations, including extending won trading hours and setting up Euroclear access for foreign investors. Despite these efforts, low bond trading volumes via Euroclear may delay its inclusion until 2025. If successful, South Korea expects US$68 billion in capital inflows.
India, on the other hand, has not implemented Euroclear and faces challenges with registration, settlement, and taxation, but it was still included in JPMorgan’s emerging-market bond index earlier this year. India’s bonds have attracted US$14 billion in inflows by the end of August, demonstrating strong investor demand despite reform delays.
Meanwhile, Vietnam’s stock market is in focus for a potential upgrade to emerging market status from frontier, with changes to its equity trading rules taking effect in November.
The timing of these potential upgrades is favorable, as global investors are seeking higher yields in emerging markets following Federal Reserve rate cuts and lower US borrowing costs.
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