This article first appeared in The Edge Financial Daily on December 12, 2017

KUALA LUMPUR: Global funds continued making their way to Malaysian shores last week, for the third consecutive week, when they bought RM377.7 million in Malaysian equity compared with RM272.3 million in the prior week, according to MIDF Amanah Invesment Bank Bhd Research.

In his weekly fund flow report yesterday, MIDF Research’s Adam M Rahim said foreign investors were net buyers daily last week, extending the daily buying to nine-straight days as of last Friday, also the longest buying streak in nearly seven months.

Global investors started the week strong by mopping up RM89.5 million, as risk-on mood improved following the passage of a Senate tax bill in the US in the preceding weekend, he said.

“However, foreign buying took a hit on [last] Tuesday as it went down to RM20.8 million net despite the FBM KLCI reaching a two-week high of 1,724 points amid the improvement in 3Q17 (third quarter of 2017) corporate earnings.

“Notably, foreign funds gradually increased their exposure in Malaysian stocks thereafter. Most importantly, foreign buying peaked on [last] Friday at RM159.5 million net, the largest acquisition in a day since Nov 23,” he added.

Adam said it was unsurprising as the mood on the local bourse was rekindled by outstanding Chinese trade data, and a rally staged by Malaysian banking stocks, while foreign inflow into Bursa Malaysia continues to buck the trend of its Asian peers.

This latest week of inflow has brought the year-to-date foreign purchase nearer to the RM10 billion level — at RM9.71 billion, he said. In the past 49 weeks, Malaysia saw 33 weeks of foreign inflows, compared with 26 weeks in 2016.

“Foreign participation remained elevated last week as the foreign average daily trade value (ADTV) stayed above RM1 billion at RM1.32 billion, while retail ADTV was still subdued at RM805 million.”

Globally, Adam said the majority of equity markets moved sideways last week with a shake-up in geopolitics as US President Donald Trump instructed the country’s embassy to be relocated to Jerusalem after endorsing the latter as Israel’s capital.

“The Dow Jones and the S&P 500 sealed fresh closing highs on [last] Friday at 24,329 points and 2,651 points respectively, while the dollar index advanced 1.09% for the week to 93.901 points. Optimism in US markets was bolstered by the upbeat US jobs data.

“Brent crude oil price declined 0.52% for the week but still hovered above US$60 (RM244.80) per barrel, buoyed by China’s booming oil demand, evidenced by its crude oil imports rising to 37.04 million tonnes in November, the second highest ever,” he said.

In Asia, Adam noted that foreign funds continued to leave the markets “on a rather large scale for the second week running”, with provisional aggregate data from the seven Asian exchanges that MIDF Research tracks suggesting investors classified as “foreign” sold US$2.16 billion net last week — the second highest weekly attrition recorded this year.