Malaysia’s Biggest Fund Buying Stocks as Foreigners Sell

ARCHIVES 2013

By admin-j On Sep 13, 2013

(Bloomberg) – Malaysia’s largest pension fund said it was a net buyer of the nation’s stocks during recent declines as foreign investors cut their holdings.

The Employees Provident Fund, which manages more than $170 billion of assets, bought good quality and fundamentally sound shares, Mohamad Nasir Ab. Latif, deputy chief executive officer of the fund, said in an e-mail interview yesterday. The FTSE Bursa Malaysia KLCI Index fell 6.8 percent from its July 24 record through Aug. 28 before rebounding 4.8 percent. The gauge slid 0.4 percent as of 11:11 a.m. in Kuala Lumpur.

“Being the biggest investor in Malaysia, we view any market extremes as opportunity for us to rebalance our portfolio for continuous return and risk diversification,” Kuala Lumpur-based Mohamad Nasir said. “We believe Malaysia is in a stronger footing forward and we expect investors’ interest to come back to this region, especially the emerging countries.”

Malaysia’s second-biggest pension fund Kumpulan Wang Persaraan (Diperbadankan),Thailand’s Government Pension Fund and Indonesia’s state retirement scheme PT Jamsostek have also said they bought local equities during the recent regional market rout, triggered by concerns over the U.S. potentially tapering its monetary stimulus. The four Southeast Asian funds manage a combined $229 billion of assets.

The KLCI index traded for 14.9 times earnings estimates for the next 12 months on Aug. 28, the lowest level since April, and was valued at 15.6 times today, data compiled by Bloomberg show. Foreigners sold 6.8 billion ringgit ($2.1 billion) of Malaysian stocks in August, exchange data showed.