This article first appeared in The Edge Financial Daily on February 7, 2019

KUALA LUMPUR: Foreign funds continued buying Malaysian stocks for the fourth week running and bought RM146.8 million worth of local equities in the last week, down from RM455.1 million seen in the preceding week, according to MIDF Amanah Investment Bank Bhd Research.

In his weekly fund flow report, MIDF Research’s Adam M Rahim said last Monday saw a moderate net inflow of foreign funds worth RM37.3 million, extending the daily buying streak to nine days.

However, this foreign buying spree came to an end the next day as international funds sold RM12.8 million net, coinciding with the local bourse’s 0.4% slide to settle at 1,690 points.

“Risk appetite was weak last Tuesday following the overnight 2.8% slump in Brent crude oil price combined with the anticipation ahead of the Sino-US trade negotiations.

“Notwithstanding this, offshore investors returned to Bursa [Malaysia] last Wednesday at a tune of RM65.1 million net, the highest foreign net inflow during the week.

“The catalyst responsible for the boost of foreign net inflows on that day was a 0.4% increase in Brent crude oil price as US President Donald Trump’s administration slapped sanctions on Venezuela’s state-owned oil company while Saudi Arabia had a deeper output cut in January than initially pledged,” he said.

Adam said the momentum of foreign net inflows continued on the last trading day of the week as foreign investors bought RM57.2 million net.

“Meanwhile, the FBM KLCI was little changed, declining by less than 1% last Thursday ahead of the long weekend and festive season,” he said.

Adam said the month of January 2019 saw a foreign net inflow of RM1.03 billion or US$249.3 million, the first monthly net inflow since September last year.

Compared with the three other Asean markets MIDF Research monitors, Malaysia had the second lowest foreign net inflow while Indonesia led, he said.

“Foreign investors were the only group which saw a weekly increase in average daily trading value, jumping by 21% to remain above RM1 billion for the second week running,” he said.