“It’s where you go when things are going badly elsewhere,” said Alexander Redman, chief equity strategist at CLSA in Singapore, who upgraded the market to neutral from underweight for as long as the war in Iran persists. “Malaysia’s in a relatively good position because it runs a current account surplus, is a net exporter of oil and gas, and the proportion of energy in Malaysia’s CPI basket is not as high as others.”
Even before the war in Iran sent energy prices soaring, Malaysia stood out among its Southeast Asian peers as the newfound darling of global investors. A rare stretch of political stability and investments in higher-value manufacturing and data centres lifted Malaysia’s appeal as some of its neighbours grappled with leadership changes and fiscal strains. The conflict in the Middle East further burnished the country’s advantage as investors sought markets better positioned to weather volatility.
The country’s stock benchmark has beaten regional peers this month as the war in Iran upended markets globally, helped by its status as one of Asia’s few net energy exporters. Foreign outflows from local equities have been relatively muted in March despite heavy selling in most other emerging Asian markets. The ringgit has maintained this year’s gains against the dollar, outperforming peers.
