Malaysian stocks are frequently favored by international investment banks, with Nomura saying, "Let's make a big move into ASEAN."

Another major international investment bank is bullish on the prospects of the Chinese stock market. Japan's Nomura Securities believes that investors should reduce their holdings of Chinese stocks and instead invest in Malaysian and Indonesian stocks.

According to analysts from Nomura Securities, including Chettan Setti and others, in a recent report, Malaysian and Indonesian stock markets are expected to benefit from the trend of accelerated rate cuts in the United States, one of the reasons for upgrading the stock market ratings of both countries from "neutral" to "buy."

Nomura Securities has also downgraded the rating of the MSCI China Index from "buy" to "neutral."

"Now is the time to make a major move into the ASEAN stock market. With the Federal Reserve about to cut interest rates and investors reigniting their interest in emerging markets, investing in the Indonesian stock market may be the best bet."

Last week, Federal Reserve Chairman Powell has issued a clear signal of interest rate cuts starting in September.

Bloomberg pointed out that before Nomura Securities raised its ratings on Malaysia's and Indonesia's stock markets, foreign capital had shown increased interest in the two countries' stock markets, with two consecutive months of inflow of foreign capital.

"Investors have good reasons to take Nomura Securities' comments seriously. In December last year, they upgraded the Taiwan stock market, and the Taiwan Weighted Index has risen by 25% this year, while the MSCI Asia Pacific Index has increased by 9.8% during the same period."

Before Nomura Securities, many internationally renowned investment banks or financial media, including JP Morgan Chase, Goldman Sachs, and Forbes, had already turned optimistic about the Malaysian market outlook.

Morgan Stanley Goldman Sachs are also bullish.

Among them, J.P. Morgan Chase, in early July, held the inaugural J.P. Morgan Chase Malaysia Forum, conducting dialogues with three ministers from the Ministry of Finance, Ministry of Transport, and Ministry of Digital, and after visiting numerous semiconductor factories in Penang, our country's rating was upgraded from "shareholding" to "neutral."

This is the first time in nearly 6 years that the investment bank has raised Malaysia's investment rating, attributed to Malaysia's policy reforms, datacenter investments, and infrastructure development.

Goldman Sachs believes that Malaysian stocks are more defensive compared to the Singapore market now, with less impact from the slowing U.S. economic growth and the pullback of the Japanese stock market, thus upgrading the Malaysian stock rating to "hold and observe."

In addition, Malaysia's economic growth prospects have improved, which is believed to further stimulate foreign capital's interest in Malaysian stocks. According to the central bank's second-quarter economic data released on the 16th, the country's Gross Domestic Product (GDP) grew by 5.9% year-on-year, marking the highest growth rate since the end of 2022, with full-year growth expected to be close to 5%.

It is worth noting that while Malaysia's export performance shines, foreign capital once again actively bought Malaysian stocks last week, with a net purchase amount as high as 1.4 billion ringgit, almost five times that of the previous week.

Driven by the demand for commodities and Electrical and Electronics (E&E) products, Malaysia's export value in July reached 131.2 billion ringgit, a 12.3% year-on-year increase, the most significant increase in nearly two years.

In MIDF's fund flow report, foreign capital last week bought Malaysian stocks net on all trading days except Friday. Among them, foreign capital inflows on Monday reached as high as 0.5749 billion ringgit.

The top 3 sectors favored by foreign capital last week were the financial services sector (1.3 billion ringgit), the utilities sector (0.1189 billion ringgit), and the communications and media sector (54.8 million ringgit).

The three sectors in which foreign capital net bought were the technology sector (-0.140.2 billion ringgit), the consumer goods and services sector (-50.2 million ringgit), and the industrial sector (-25.9 million ringgit).

Local institutions sold Malaysian stocks net throughout the week, with a total net sell amount of 1.120 billion ringgit.

As for retail investors, apart from entering the market on Friday, they have been selling off on all other trading days, selling a total of 0.2 billion84.4 million ringgit of Genting shares.

In terms of participation, all three parties have seen growth, with foreign capital trading the most active, with an average daily trading value (ADTV) rising by 35.8%, while local institutions and retail investors increased by 33.1% and 19.0% respectively.

It can be seen that bank stocks were greatly favored by foreign capital last week. Will the upcoming financial reports of major banks be positive or negative?