KUALA LUMPUR: The last three trading days in the last week could be a turning point for Bursa Malaysia, MIDF Research said, as foreign investors turned into net buyers of equities listed on Bursa.

In his weekly fund flow report yesterday, MIDF Research head Zulkifli Hamzah said the amount mopped up was RM685 million on a net basis, still small compared with the RM17.1 billion yanked out from the market in the year until September 2015.

“However, it broke what had been among the longest stretches of sustained back-to-back weekly selldown on record.

“It was not an auspicious start to the week. With the US Federal Reserve’s (Fed) Federal Open Market Committee (FOMC) meeting looming, foreigners sold RM86 million on Monday (yesterday), following the heavy outflow on the preceding Friday,” he noted.

Zulkifli, however, said buying interest crept up last Tuesday before the market adjourned for a midweek Malaysia Day break last Wednesday.

He said foreign investors returned with proverbial vengeance last Thursday, on the eve of the announcement by the FOMC.

“Foreign funds bought a whopping RM482.4 million net on Thursday (last Thursday), the highest one-day foreign haul recorded by Bursa since the RM545 million surplus recorded on May 30, 2013.

“It was followed by a RM147 million purchase on Friday (last Friday),” he said.

Zulkifli added that for 2015, last week’s load-up reduced the cumulative net foreign outflow to RM16.5 billion, significantly surpassing the RM6.9 billion outflow for the entire 2014.

He said the worst of the foreign money attrition is likely to be in the past as the foreign liquidity overhung in the equity market is low.

“Foreign participation rate surged last week. The average daily gross volume spiked to RM1.51 billion last week, the second highest this year. On Thursday (last Thursday), foreign participation hit RM2.13 billion, the third highest this year.

“Local institutions sold RM520.3 million on RM2.81 billion participation, the highest since August 2014. Meanwhile, retailers remained sceptical about the market, offloading a relatively heavy RM164.7 million on yet moderate participation,” he said.

Commenting on the regional markets, Zulkifli said equity markets around the world ended last week on a mixed note.

He said Asian markets, excluding China and Japan, performed relatively better than the rest to stay in the green zone.

“For the most part of last week, markets around the world were bracing for a decision on interest rate by the Fed.

“The Fed’s no-hike decision left the markets mixed and in a state of further uncertainty. However, Asian equity markets had a strong Friday, but Wall Street had the last say [by] closing the week on a bearish note,” he said.

Zulkifli said most Asian currencies rallied last Friday, following an edgy start with the ringgit way ahead of the pack.

He said after eight straight weeks of selling, global funds courted Asian equities again last week. “This is unsurprising as the size of the outflow had been receding noticeably in the preceding two weeks.”

This article first appeared in The Edge Financial Daily, on September 22, 2015.