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June 2024
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Malaysia fund industry assets shrink in January-September as investors fret over global economy

The declines were primarily driven by fears about a global economic slowdown as central banks raise interest rates to battle soaring inflation
By Goh Thean Eu   
November 25, 2022

Malaysia’s fund management industry assets fell 6.51% through the first nine months of the year as investors sold off their holdings in stock, bond and money market funds, worried that global rate hikes to fight inflation may lead to an economic slump.

The industry’s total assets under management as of end-September was 889.09 billion ringgit (US$196.68 billion), down from 951.05 billion ringgit at the end of 2021, according to figures published on the website of Securities Commission Malaysia.

The regulator typically posts the data without providing analysis.

Assets of stock funds plunged almost 14% to 400.45 billion ringgit, bond funds dropped 2.85% to 207.24 billion ringgit, and money market funds fell 4.21% to 140.52 billion ringgit.

The across-the board declines were primarily driven by fears about the global economy, according to a portfolio manager at a Malaysian fund management company.

“While the overall investment community expects interest rates to trend upwards this year, the concern is central banks may increase the rates too much or too fast, which can hurt global economic recovery,” he tells Asia Asset Management, speaking on condition of anonymity.