KUALA LUMPUR (July 28): Malaysia’s capital market will still be attractive for investors despite the recent monetary tightening globally, particularly for those who have a medium-term investment horizon, said Bursa Malaysia Bhd Chief Executive Officer Datuk Muhamad Umar Swift.

“When we look at Malaysia, we have [a projected GDP] growth of around 5.5% [for 2022], and it is a compelling story,” he said during Bursa Malaysia’s financial results briefing held virtually on Thursday (July 28). 

“Theoretically, there should be a flight to higher yield products [when interest rates are increased]. That is what we see particularly in the foreign exchange market. That being said, it may also spur interest in the equity market, as we have more clarity,” he added.

Muhamad Umar said with the ringgit weakening recently, there is an upside potential for investors to invest in Malaysia, given the country’s strong current account surplus.

“This is a tremendous opportunity for investors, particularly foreign investors, to come to our market over a medium term for potential uplift on foreign exchange, as well as growth of our companies,” he said.

The ringgit has depreciated by 6.85% to 4.4517 against the US dollar year-to-date.

The stock exchange operator on Thursday reported a 33.16% fall in net profit for the second quarter ended June 30, 2022 (2QFY22) to RM59.47 million, from RM88.97 million a year ago, mainly due to lower securities trading revenue.

Quarterly revenue declined 22.55% to RM151.89 million, from RM196.1 million previously.

Bursa’s average daily trading value for 2QFY22 also fell by 42% to RM2.23 billion, from RM3.86 billion.

For the first half of the year, Bursa’s net profit dropped 39.42% to RM127.44 million, from RM210.36 million in the previous year’s January-June period, amid lower operating revenue — down 26.4% to RM309.4 million from RM420.2 million — amid a decline in securities trading revenue. 

Six-month revenue went down 25.96% to RM317.185 million, from RM428.37 million previously.

At the briefing, Bursa Malaysia Chairman Tan Sri Abdul Wahid Omar said Malaysia’s economic growth is expected to be supported by firm domestic demand and this could potentially lift investor sentiment and boost stock market performance.

“While Bursa Malaysia remains committed to long-term market development through products and ecosystem enhancement, we will also focus on a number of items to help boost market sentiment and sustain foreign investors’ interest in the short-term,” he added.