Foreign interest in Malaysian equities to improve in 2H2023 – Bursa Chairman

Inve$t | Market Sentiments | 4 August 2023

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According to Bursa Malaysia Berhad chairman Tan Sri Abdul Wahid Omar, foreign shareholdings’ level in the local bourse is expected to improve in the second half of this year, underpinned by the attractive valuation of the listed equities and the country’s solid economic fundamentals. He was speaking at a press conference after announcing Bursa’s 2QFY2023 results.  

The current valuation of the local equity market remains attractive and presents opportunities for investors, including foreign investors, to reap benefits from the potential upside. His optimism is based on the prospect of peaking interest rates globally, which will likely benefit emerging markets like Malaysia, as this would draw renewed interest and foreign fund inflows to this region. 

As interest rates peaked in the US and UK, Europe and other developed economies, towards the end of this year, he has seen a reversal of the flows coming back to emerging markets. For the month of July, RM1.1 billion of net inflows, therefore lowering the net outflow for the year to about RM3 billion. As foreign investors come back into our market, he expects foreign shareholdings to increase from the current 20% level. 

The country’s long-term economic growth prospect will continue to attract foreign investors which is expected to sustain the momentum. 

Labour market strengthened in 2022 as unemployment rate dropped – DOSM 

According to the Department of Statistics Malaysia (DOSM) Chief statistician Datuk Seri Dr Mohd Uzir Mahidin, the labour market continued to strengthen last year with the unemployment rate dropping to 3.9%. He was referring to the Statistics of the Labour Force, Malaysia 2022 released by the Department of Statistics Malaysia (DOSM) on July 31, 2023.  

He said that the positive economic environment throughout last year led to a favourable labour force situation, with the creation of more job opportunities in various industries. The recovery from the economic recession due to the Covid-19 pandemic reached a turning point this year, prompting positive changes and opening up more jobs in various industries. Additionally, the flexi-working concept of working remotely and having flexible working arrangements has become commonplace. This gives more flexibility to employees and a better work-life balance. 

The unemployment rate in 2022 decreased by 0.7% to 3.9% from 4.6% the previous year, with the number of unemployed persons down by 14% to 630,400 people compared to 733,000 people in 2021. Three states recorded higher unemployment rates than the national level in 2022, namely Sabah at 7.5%, Labuan (7.2%) and Perak (4.6%). 

In 2022, the labour force in Malaysia increased by 1.4% to 16.02 million people while the labour force participation rate was recorded at 69.3%. The working population was 15.39 million people in 2022, which is an increase of 2.2% compared to 15.06 million in 2021. In terms of employment status, the working population category was 78.3% comprising 12.05 million residents while the number of self-employed population was 15.1% with the involvement of 2.33 million people. 

The semi-skilled occupation category had the largest composition of total employment at 58.4% or 8.99 million people, followed by the skilled category (29.6%, 4.56 million) and the low-skilled category (12%, 1.84 million). 

In summing up the overall labour force situation in 2022, he said that Malaysia’s economic growth is projected to moderate this year. The increase in the number of tourist arrivals will continue to boost the recovery in the tourism sub-sector along with the improved market position, especially in the service sector. 

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