Malaysia Stocks Hit Record as Foreigners Buy Ahead of Elections

(Bloomberg) -- Stock market volatility, global trade tensions, geopolitical risks aren’t ending the fervor for the second hottest stock market in Southeast Asia.

A rally in consumer stocks this year and over $753.2 million in foreign inflows boosted Malaysia’s benchmark stock index to close at an all-time high Thursday, ahead of the nation’s 14th general election on May 9.

Malaysia’s equity market is making a comeback this year after a 9.5 percent rally in 2017 lagged Asean counterparts, some of which boasted double-digit growth. The nation’s ringgit is still Asia’s third-best performer this year as a surge in the price of oil boosted optimism for the only net exporter of energy among Asia’s major economies. Strengthening private and government investments have also helped drive economic growth of 5.9 percent last year, the fastest pace since 2014.

“We’ve got an election coming up and actually the economic data for Malaysia has been quite good recently. Things like exports have been strong and relatively insulated from a potential trade war,” Jim McCafferty, head of Asia excluding Japan equity research at Nomura Holdings Inc. said in an interview in Hong Kong. “Five years ago it was like a dirty word but now there’s more investor interest.”

According to a Bloomberg analysis of the nation’s 2013 vote, Malaysian stocks experienced inertia before the parliamentary elections, and then posted a relief rally led by companies with strong earnings growth.

To contact the reporters on this story: Choong En Han in Kuala Lumpur at echoong6@bloomberg.net, Livia Yap in Singapore at lyap14@bloomberg.net.

To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Teo Chian Wei

©2018 Bloomberg L.P.