The Phantom of the Pakatan Opera
Since GE14, foreigners have been pulling money out of our stock market every single day. it is now and unprecedented 24 days straight of foreign net selling that has seen RM7 billion leave our stock market and withdrawn from Malaysia.
Other than the stock market, our bond markets suffered the same fate as a net RM12.9 billion has been pulled out by foreigners in the month of May alone. The same trend has continued in June so far.
https://www.nst.com.my/business/2018/06/378815/foreigners-sells-rm129-billion-malaysian-debt-securites-may
This means more than RM20 billion of investments have been pulled out by foreigners since GE14.
Kenanga Investment Bank says:
“Investor sentiments were rattled by the unprecedented outcome of GE14 and by the subsequent news flow on the PH govt’s policy decisions. We expect continued selling pressure in the coming months following rising concerns that credit rating agencies would put Malaysia on ratings watch due to the new government’s decision to cancel large scale infrastructure projects. The implementation of fuel subsidies and the removal of the GST which could weigh on the government’s ability to meet its fiscal target is adding pressure to sentiments.
“Additionally, the sudden resignation of BNM’s governor and the change in several GLC heads is also expected to add uncertainty to the domestic bond market.,” it added.
This has resulted in the interest yield of our bonds going to 4.17% – further increasing the amount of money our govt has to pay to service our debt.
The outflows had also put pressure on our BNM’s reserves which has dropped and resulting in the ringgit being among Asia’s worst performing currencies since GE14.
For the sake of Malaysia, I hope that our new govt will stop all these political vengeance and stop doing these political witch-hunt press conferences that serves to undermine our markets further.
Source: The Phantom of the Pakatan Opera
