Page 90 - SC Annual Report 2018 (ENG)

Securities
Commission
Malaysia
ANNUAL
REPORT
2018

Chart 9
Sentiment towards MGS remained positive, supported by strong economic fundamentals
10-year sovereign bond spreads againts UST Cumulative non-resident flows
in selected ASEAN countries of ringgit bonds in 2018
600 10

500 5

400 0

300 -5
bps RM billion
200 -10

100 -15

0 -20

-100 -25
Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18
Indonesia Thailand Philippines Malaysia

2016 2017 2018
Public sector Private sector
Source: Bloomberg, BNM

The Malaysian equity market capitalisation property sectors in 2018. Weak corporate earnings
contracted by 10.8% to RM1.7 trillion in 2018 was also a pressure point for the FBMKLCI for the
from RM1.9 trillion in 2017, amid challenging year. The Small Cap and ACE Market indices ended
external developments. The domestic stock market 2018 lower by 33.7% and 34.6% respectively,
commenced the year on a stronger footing, declining more towards year end on profit-taking
mirroring global equity markets performances but activities (Chart 10).
settled lower towards the end of the year amid
heightened external headwinds from the escalating The challenging global environment also resulted in
trade tensions between the US and China, the shifts in foreign investor positions throughout the
uncertainties surrounding US monetary policy year. Foreign investors registered a net outflow at
tightening, fear of contagion from the EMEs and the end of the year amounting to -RM11.7 billion
volatile oil prices. (Chart 10). Local institutional investors turned net
buyers for the year to the tune of RM7.7 billion,
Following a year of event-driven fluctuations with the remainder taken up by retail investors, thus
in sentiment, the FBMKLCI however, remained cushioning foreign equity outflows. The high level
resilient compared to global and regional markets of domestic liquidity in the capital market allowed
performance, declining by 5.9% to close at for sustained orderly market adjustments of funds
1,690.58 as at end December 2018. The FBMKLCI between non-resident and local investors.
was weighed by construction, technology and

80 | PART 4 »» CAPITAL MARKET REVIEW AND OUTLOOK

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