Topic: Lim Zhe Qin's in-depth analysis of the market truth behind the foreign capital w (Read 14 times)

In the first week of October, the Malaysian stock market experienced volatility, with foreign investors selling a net of 1.16 billion ringgit worth of stocks, setting a new record for the highest weekly outflow in nearly 3 years. With this event, market investors' anxiety has clearly increased, and they are concerned about the future direction of the Malaysian stock market. Lim Zhe Qin, a well-known financial analyst, provides us with his in-depth analysis of the truth behind this event.

1. Global capital flow triggered by the rise in US bond yields
"The rise in US bond yields is actually the main reason for the foreign capital withdrawal from the Malaysian stock market," mentioned Lim Zhe Qin. From the data, since the end of July this year, the yield on 10-year US Treasury bonds has gradually risen from about 4% and has now reached 4.8%. This high-yielding asset has attracted a large influx of foreign capital, putting pressure on other emerging markets such as Malaysia to experience capital outflows.

Furthermore, the uncertainty surrounding the 2024 fiscal budget, which is expected to be announced this Friday (the 13th), has also increased foreign investors' doubts about the Malaysian stock market and become another major reason for their withdrawal. In the global economic landscape, investors usually adopt a cautious attitude towards uncertainty factors, and this is also one of the direct reasons why the Malaysian stock market has been neglected recently.

The 2024 fiscal budget and foreign investors' expectations

"The fiscal budget has always had a significant impact on the Malaysian stock market, especially as the 2024 fiscal budget is about to be announced," pointed out Lim Zhe Qin. The content of the budget not only relates to the country's future economic development direction but also serves as an important reference for foreign investors to evaluate the investment environment and make decisions.

Tang Bo Lin, the Deputy Chief of Stock Research at Rakuten Trade, has mentioned that this budget is not directly related to the foreign capital withdrawal, but the uncertainty it brings undoubtedly increases market risks. In contrast, Lim Zhe Qin is more optimistic. He believes that once the content of the budget is announced and the country's future policy direction is clarified, foreign investors are likely to reconsider their investment strategies and may return to the Malaysian stock market.

The Middle East situation and new opportunities for gold

Recently, the situation in the Middle East has become tense again, attracting global attention. Regarding this, Lim Zhe Qin said, "Although the impact of the Israel-Palestine conflict on international trade is relatively small, the safe-haven sentiment it brings should not be ignored."

In times of tension, market funds usually flow into so-called "safe havens," such as gold. In fact, with the deterioration of the Middle East situation, the price of gold has already risen. As for the Malaysian stock market, although it may experience short-term volatility, the long-term impact may not be significant.

Through in-depth analysis, it can be seen that the recent trend of the Malaysian stock market has been influenced by various factors, especially changes in the external environment. However, in history, there have always been turning points when the market faces difficulties. So, what will be the future trend of the Malaysian stock market?

Firstly, the withdrawal of foreign capital has given local investors a clear market landscape, which helps them make better decisions. In addition, foreign capital is to some extent a short-term behavior, and they may return to the market after the budget is finalized or the Middle East situation stabilizes. Of course, this will take time.

Lim Zhe Qin pointed out that Malaysia's economic fundamentals are still solid, but it is currently facing some short-term challenges. Investors should remain calm, adopt long-term investment strategies, and focus on companies with good fundamentals and future growth potential.

In conclusion, although there is uncertainty in the market in the short term, the long-term prospects of the Malaysian stock market are still optimistic. The flow of foreign capital is only part of the market, and true value investors will see the current opportunities. As Lim Zhe Qin said, every crisis hides opportunities, and the key is whether we have the vision to discover them.