Do more to make Malaysia sexy to fund managers: Aberdeen Asset

Malaysia needs to make itself interesting to attract foreign fund managers to invest here.

"We are doing the right things, but the Malaysian economy is not currently viewed as sexy compared to, say, Indonesia with a population of 260 million people and relatively no exports," Aberdeen Asset Management managing director Gerald Ambrose said at the FTSE Malaysian Market Insights and Investment Opportunities Seminar in Kuala Lumpur yesterday.

Malaysia had an index weighting of more than 20 per cent in the 1980s, but the weighting under the FTSE Global All Cap Index for Asia-Pacific, excluding Japan, has dropped since to 3.7 per cent.

"The cruel truth is that you don't have to have some Malaysia (exposure) anymore. So Malaysia has to do a lot more to be on that portfolio on merit," Ambrose said.

CLSA Quantitative Research head Chris Lobello viewed Khazanah Nasional Bhd's move to place out some of its shares in Telekom Malaysia Bhd to institutional investors as a step in the right direction.

"The liquidity issues in Malaysia make it a difficult place to invest in. With it (Malaysia) only making up half a per cent of global indices, it is easy to step away from it," Lobello said.

He added that the only thing to do was to push up the country's weighting by promoting liquidity and free float in the stock market.

Meanwhile, a report on the FTSE Bursa Malaysia Index series indicated that liquidity in the Malaysian market had increased since the transition to the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) a year ago.

Monthly trading value of the Main Market has risen 13.6 per cent in the period from July 6 last year to July 6 this year.

The report also indicated that over a one-year period, Malaysia has seen strong growth and outperformed most of the regional benchmarks.

The FBM KLCI has risen 22.6 per cent year on year compared to the FTSE Asia Pacific All Cap Ex Japan Index, which rose only 10.2 per cent.

The FBM KLCI covers 30 companies, and around 70 per cent of the FTSE Bursa Malaysia Emas Index, a broad benchmark that aims to capture 98 per cent of Bursa Malaysia's Main Market.