KUALA LUMPUR (March 3): After selling in 19 out of the last 20 weeks, including the last seven consecutive weeks, foreign investors turned net buyers of Malaysian stocks, according to MIDF Research.

In his fund flow report Monday, MIDF Research head Zulkifli Hamzah said that last week, foreign portfolio investors made a net purchase of Malaysian shares in the open market (i.e excluding off-market transactions) amounting to RM296.2 million.

“In the preceding 20 weeks, the net sale averaged RM565.3 million,” he said.

He said the point of reversal was last Thursday when foreign funds bought RM58.1 million net.

Zulkfli said that on Friday, net purchases surged to RM419.1 million, the highest recorded in a single day since the May 8, last year, in the aftermath of the General Election.

"Interestingly, foreign participation rate was still below the RM1 billion mark. Average daily foreign participation rate (average daily gross purchase and sale) did surge +35% to RM986 million from RM732 million the week before.

“However, it was still below the RM991 million average per week in 2013. Indeed, foreign participation had exceeded RM1 billion in 25 weeks since the start of 2013,” he said.

Zulkifli said retail investors’ optimism also spiked, as reflected by their net purchase amount of RM164.9 million, the highest since mid-November last year.

He said the daily participation rate stayed above the RM1 billion mark for the second consecutive week, at RM1.07 billion, compared with RM1.28 billion the week before.

“Meanwhile local institutional funds are currently aggressively offloading their position and realising profit early in the year in order to meet their dividend targets.

“Local funds sold RM461.1 million net last week, the highest since mid-September 2013.

“Participation rate remained elevated at RM2.46 billion, the second highest since August 2013. Indeed, local institutional participation had exceeded the RM2 billion mark in the last eight weeks,” he said.