This article first appeared in The Edge Financial Daily on February 20, 2018

KUALA LUMPUR: Foreign investors turned net buyers on Bursa Malaysia last week after the heavy sell-off totalling RM1.75 billion in the preceding week. However, the amount of shares bought was barely RM4.5 million — the smallest sum bought in a week thus far this year, according to MIDF Amanah Investment Bank Bhd Research.

In its weekly fund flow report yesterday, MIDF Amanah said foreign funds were net buyers on all trading days except last Monday, which saw an attrition of RM230.3 million net.

“Meanwhile, foreign buying was the highest [last] Tuesday at RM112.7 million net with trading value exceeding RM1.5 billion, the highest in four trading days.

“[Last] Wednesday, the announcement of Malaysia’s gross domestic product expanding by 5.9% year-on-year in 2017 compared to a 4.2% expansion in 2016, saw the FBM KLCI close at a four-day trading high of 1,835 points.

“Nonetheless, foreign buying only stood at RM62.4 million net [last Wednesday], the second lowest during the week, as foreigners remained anxious ahead of the US inflation data,” said the research outfit.

MIDF Amanah said the FBM KLCI inched higher to 1,838 points last Thursday as investors shrugged off strong US inflation data, but foreign buying declined further to RM59.7 million net as foreign investors entered risk-off mode, right before the Chinese New Year holiday.

Overall, Malaysia bucked the trend with an inflow, as the Philippines, Thailand and Indonesia all experienced attrition, the report said.

“Foreigners have so far acquired RM1.86 billion net in the first seven weeks of 2018, higher than the RM1.11 billion recorded during the same period in 2017,” said MIDF Amanah.

Although the foreign average daily trading value declined by 35% from RM1.61 billion in the week before to RM1.04 billion last week, MIDF Amanah deemed foreign participation to still be healthy, given last week having been a short trading week.