$MAYBANK (1155.MY)$
The search for winners of the Federal Reserve's pivot has sparked a surge towards Malaysia and Indonesia.
Author: John Cheng & Abhishek Vishnoi / Bloomberg
August 31, 2024, 11:13 AM
Photo by Low Yen Yeing/The Edge
(August 31): With the Federal Reserve (Fed) in the USA seemingly prepared to start monetary easing, global investors are increasing exposure to India and Malaysia, betting that these two markets will benefit more than their counterparts in developing countries.
One of the factors attracting funds into the two Southeast Asian markets is a sound fiscal policy and focus on new technologies such as electric vehicles (EVs) and data centers, which have long been overshadowed by larger competitors India and China. Increasingly, it is believed that their relatively light foreign positioning and reasonable valuations will attract more inflows from overseas.
John Lin, portfolio manager at AllianceBernstein in Singapore, said, "Indonesia and Malaysia will benefit more from their responsible fiscal behavior, which is what you need because, in theory, the pivot of the Federal Reserve is a boon for the entire universe of emerging markets." His emerging market fund has added two markets at the expense of India this year.
According to the latest data compiled by Bloomberg, in August, Indonesia, Malaysia, and the Philippines were the only countries in Asia that saw an inflow...