KUALA LUMPUR (April 20): Investors classified as foreign bought RM307. 3 million last week compared to RM354.4 million, according to MIDF Research.

In his weekly fund flow report today, MIDF Research Zulkif Hamzah said that in contrast to the apparent selldown in Jakarta and Manila, foreign funds persisted with their built-up of Malaysian equity portfolio.

“We note that foreign investors were net buyers every single day last week.

“Indeed, they had been net buyers in 10 out of the last 11 trading days, during which an amount of approximately RM700 million had been mopped up.

“Foreign funds sold RM539.9 million net in March, and this has already been reversed in April, as the cumulative net purchase for the month until last Friday was RM633.1 million,” he said.

Zulkifli said that for 2015, last week’s purchase reduced further the cumulative net foreign outflow to RM2.79 billion.

He said that in comparison, the cumulative foreign outflow for the entire 2014 was RM6.93 billion.

“Foreign presence on Bursa increased suddenly last week.
“Participation rate of foreign investors rose to its highest in four weeks. The daily average gross purchase and sale climbed back to above RM1 billion at RM1.05 billion,” he said.

Zulkifli said the continued foreign buying has enabled local investors to offload their position.

He said local institutions sold RM159.6 million net, the fifth consecutive week of selling.
He explained that participation rate surged to RM2.51 billion average daily, the third highest this year.

Zulkifli said local institutions had absorbed RM3.72 billion net so far this year.

He said that in 2014, they mopped up RM8.18 billion net.

He said retailers also continued to exit the market last week, selling RM147.7 million.

“In the last five weeks, retailers have sold a cumulative RM650 million.

“Most significantly, retail participation rate spiked to RM947 million last week, the highest this year.

“Amid retail selling, the FBM Smallcap index rose 2.6% last week, its best weekly performance in 12 weeks,” he said.

Commenting on the region, Zulkifli said that after a commendable performance the week before, things turned rough for global equity.

He said many indices ended the week in the redzone, but it was the rout in the Western markets on Friday which was rather disconcerting.

Zulkifli said there was a sudden drop in risk appetite on Friday, and attributed this to agitations over corporate earnings, signs of higher inflation and concerns from China to Greece.

Zulkifli said the after-market rout on Friday has yet to be reflected in Asia.

“However, there are already signs of apprehensions in some Emerging Asian markets, specifically Manila, Jakarta and India

“Meanwhile, the party is still ongoing in North Asia where China’s market continued to rally for the sixth consecutive week,” he said.

Zulkifli said global money continued to flow moderately to Asia for the third consecutive week.

“The tide is idle as market fatigue appears to be setting in Wall Street ahead of the potentially volatile month of May

“In Asia, foreign funds remained heavy buyers of Korean equity last week, mopping up US$1.47 billion, the highest since April 2014.

“However, Emerging Asia remained in struggling mode. There was significant mood swings in Jakarta and Manila where foreign investors sold aggressively,” he said.