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China to remain Malaysia’s largest trading partner: Miti

KUALA LUMPUR: China will likely remain as Malaysia’s largest trading partner, looking at the current trend, said Deputy International Trade and Industry Minister Dr Ong Kian Ming.

He said even with the spectre of the US-China trade war looming, Malaysia-China trade continued to grow at a higher rate compared with other trading partners.

In a statement today, Ong said from January to November 2018, Malaysia’s total trade rose 6.2% as compared with the same period in 2017, contributed by 6.9% growth in exports and 5.3% rise in imports.

During the period, Malaysia-China total trade expanded by 8.5%, with an 11.3% increase in exports and 6.3% growth in imports.

He said Malaysia was also poised to attract more investments and benefit from import substitution as a result of the US-China trade war.

Ong said there were about 300 out of the top 500 Chinese companies listed by Fortune Magazine which had yet to invest in Malaysia.

“These are the companies that we want to entice to Malaysia by showing off our natural and strategic advantages as an investment location,“ he said.

From January to September 2018, approved manufacturing foreign direct investment (FDI) from China had already reached RM15.62 billion.

“More than 50% of the approved manufacturing FDI from Chinese companies came after the 14th General Election (in May 2018), showing that companies from China continue to demonstrate confidence in the Malaysian economy under the new government,“ he added.

He said a recent study by Nomura Global Economics ranked Malaysia as the top country, based on its aggregated Nomura Import Substitution Index scores, that could benefit in particular from the exports of electronic integrated circuits, liquefied natural gas and communication apparatus.

Meanwhile, the Economist Intelligence Unit projected Malaysia to be a beneficiary in diverted production and investment in the automotive, as well as information and communications technology products.

“While a prolonged US-China trade war would not be welcomed by a small and open economy like Malaysia, there are mitigating factors that will somewhat cushion the impact for us,“ Ong added.

Foreign buying on Bursa gathers steam

PETALING JAYA: International funds cquired RM417.3 million net of local equities last week, the highest inflow recorded since September 2018 and about 16 times the net inflow in the previous week.

MIDF Research said foreign investors turned buyers starting in the last two weeks, after nine consecutive weeks as sellers.

“Foreign investors continued hitting the buy button, for equities listed on Bursa. They turned buyers after a short-selling mode on Monday, ending the week with net positive,“ the research house said in its fund flow report today.

Foreign investors first bought RM51.7 million net on Tuesday followed by a net total of RM378 million for the rest of the week. The net buying quantum peaked on Friday, on renewed trade optimism.

It was reported that the US is considering measures to roll back tariffs on Chinese products, which helped to offset the fears of a global economic slowdown after disappointing Chinese trade data. Notably, Chinese exports and imports recorded a drop in December, stemmed from the trade war impact.

So far in 2019, MIDF Research said foreign funds bought RM424.5 million net or US$103.4 million net of local equities.

“In comparison to the other three Asean peers we monitor, namely the Philippines, Indonesia and Thailand, Malaysia has the lowest foreign net inflow on a year-to-date basis,“ MIDF said.

Despite the inflows into Bursa, participation rate among the various group of investors recorded a decline across the board. Foreign average daily traded volume (ADTV) dipped 20.7% to settle below the RM1 billion level.

Meanwhile, retail market and local institutions ADTV followed suit, down by 14.9% and 17% respectively.

MIDF Research said positively, retail market’s ADTV still remain above its healthy level of RM800 million.

Stock-wise, Public Bank Bhd registered the highest net money inflow of RM18.04 million last week. Its share price appreciated by 0.16% for the week, underperforming the FBM KLCI which inched 0.53% on a weekly basis.

Malaysia Airports Holdings Bhd, however, recorded the highest net money outflow of RM13.32 million last week. Its share price advanced by 1.38% for the week to close at RM8.10.

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