KUALA LUMPUR (Dec 3): A stronger ringgit and improving Malaysian economy may lure overseas investors back to the country after the exit of foreign money from local assets in 2020, according to MIDF Amanah Investment Bank Bhd research head Imran Yusof.
"This year, we have seen foreigners exiting [the] Malaysian equity market. We believe [a] stronger ringgit, improving economy could entice foreign investors back to Malaysia," Imran said today during a virtual briefing on the market outlook.
At the time of writing today, the ringgit strengthened to 4.0712 against a weakening US dollar. The US dollar index, which measures the value of the US dollar against a basket of currencies, fell to 90.9680.
The ringgit, however, weakened against other currencies.
Compared to the Singapore dollar, the ringgit was traded at 3.0457. Against the Australia dollar, the ringgit was transacted at 3.0270.
Malaysia's economy, as measured by gross domestic product, contracted 2.7% in the third quarter of 2020 (3Q20) from a year earlier versus 2Q20's year-on-year 17.1% contraction, according to Bank Negara Malaysia's (BNM) statement on Nov 13, 2020.
The improvement largely reflected the reopening of the economy from Covid-19 containment measures and better external demand conditions, the central bank said.
"On a quarter-on-quarter seasonally adjusted basis, the economy turned around to register an expansion of 18.2% (2Q20: -16.5%)," BNM said.
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