(Bloomberg) -- Looking for contagion from Turkey’s economic crisis? You won’t find it in Malaysia.
The Southeast Asian nation’s stock market surged into overbought territory last week and the sole U.S.-listed exchange-traded fund tracking the measure attracted the most cash since 2011. The rally came as investors in developing-nation assets fretted over whether Turkey’s plunging currency would spark a selloff in other countries.
Read more: Turkey Too Much of a One-Off to Undermine Emerging-Market Case
The iShares MSCI Malaysia ETF, or EWM, attracted $106 million last week, or almost 20 percent of its total assets, and the Malaysian equity index has recovered 8.7 percent from a July low. Foreigner investors have begun to return to the country after a flight following the surprise victory of Prime Minister Mahathir Mohamad, who decided to review some infrastructure projects and revealed the extent of a corruption scandal from the previous government.
“Foreign direct investment and exogenous demand for domestic goods is such a fantastic stimulus for an economy like that," said Andy Wester, senior investment analyst at Proficio Capital Partners.
While Malaysia’s ringgit hasn’t escaped unscathed the weakening in emerging-market currencies, it’s held up well compared with other Asian countries. That’s likely added to the allure of EWM, which has almost 40 percent of the fund’s exposure in banks. At the same time, the ringgit weakness will make Malaysian oil cheaper overseas, giving a boost to the country’s crude producers and investor sentiment about the broader economy.