KUALA LUMPUR (Oct 15): The FBM KLCI closed higher by 2.11 points or 0.12% to 1,713.25 points today, lifted by banking counters as foreign investors see fundamental strength in the Malaysian economy.

As at market close, the Finance Index increased 0.52% to 14,660.65 points. However, the Properties Index dropped 0.32% to 1,179.58 points, while the Plantation Index fell 0.47% to 7,461.94 points. 

Trading volume decreased to 2.4 billion shares worth RM2.54 billion compared with Tuesday’s 2.47 billion shares worth RM2.46 billion.

“There is a net inflow of foreign funds into Malaysia over the past few days. I think foreign investors are seeing fundamental strength in our economy, given our continuous trade surplus and increasing export,” Areca Capital Sdn Bhd chief executive officer Danny Wong Teck Meng told theedgemarkets.com.

Wong  said foreign investors also have a tendency to capitalise on the weaker ringgit. The ringgit strengthened 1.83% to close at 4.1213 against the US dollar, and up 1.04% to 2.9945 against the Singapore dollar.

“It become more persuasive for them (foreign investors) to come back, not only because of the fundamental, but (Malaysian stocks) also more affordable to them. And naturally, they will look at blue chips like banking stocks,” he added.

In its weekly fund flow report on Monday, MIDF Research noted that there was a dramatic change in the direction of foreign money flow last week.

“After selling for two straight weeks, foreign investors bought RM783.4 million net in the open market, the highest amount amassed since May 2014,” the research house said.

Today, Bursa saw 476 gainers, 376 losers, while 323 counters remained unchanged. Top gainers include Ajiya Bhd and Top Glove Corp Bhd; while biggest losers include Gamuda Bhd and SKB Shutters Corp Bhd.

The most active counter was XOX Bhd, with 99.41 million shares done today.

Regionally, Reuters reported that Asian shares rose to two-month highs on Thursday and the dollar struggled near multi-week lows after weak US economic data added to expectations that the Federal Reserve will delay hiking interest rates.

Japan's Nikkei closed 1.15% higher, while Hong Kong's Hang Seng Index rose 2% and South Korea's Kospi increased by 1.18%.