KUALA LUMPUR (Dec 29): The outflow of foreign funds from Malaysian equities doubled to RM6.8 billion year-to-date as at Dec 26 this year, a reverse of the inflow of RM3 billion in 2013, according to MIDF Research.

In his weekly fund flow report Monday, MIDF Research head Zulkifli Hamzah, however, said that after seven straight weeks of foreign money attrition, Malaysia reported a small inflow last week, with investors classified as foreign buying local equity worth RM28. 1 million.

He said this abruptly halted three weeks of harrowing selldown, from Nov 28 to Dec 19, during which foreign investors dumped RM2.85 billion of Malaysian equity.

He said the foreign selling streak that stretched for 18 consecutive days from Nov 26 ended on Dec 19.

“It was a disconcerting period of selldown, but the length of the period was still shorter than the 29 consecutive days of selling recorded from Jan 3 to Feb 26 this year.

“We note that foreign investors had been net buyers in three out of the last four trading days on Bursa,” he said.

Zulkifli said that, as expected, volume was very thin.

He said foreign participation rate (daily average gross purchase and sale) plunged to RM553 million, the lowest this year.

“Local participation rate was also low. The daily average gross purchase and sale of local retail and institutional investors were the lowest during the year at RM483 million and RM1.55 billion respectively,” he said.

Zulkifli said local retailers were currently very bearish, taking any opportunity of a market rebound to clear out their positions.

He said retailers sold RM74.5 million last week, and RM119.6 million the week before.

Commenting on the region, Zulkifli said share prices in most markets around the world ended the Christmas week on a positive note.

He said it was a seasonally slow trading period as most investors were away.

Still, he said prices continued to rebound in the bellweather market, Wall Street, after the sharp selloff in the second week of December.

“The Dow Jones and S&P500 added 1.4% and 0.9% respectively. It was a significant week as the Dow Jones broke the important psychological threshold of 1,800 points for the first time.

“It was a 'Santa Clause' rally indeed and came after the US GDP growth accelerated to 5% on annualised basis in 3Q14,” he said.

Zulkifli said the FBM KLCI was the best performing market last week, after halting three straight weeks of losses. The index rose 2.8%, the best weekly gain this year.

“After the heaviest foreign fund attrition from Asia this year, the outflow took a breather last week, more on account of the holiday breaks as we approached the end of the year,” he said.