KUALA LUMPUR: Foreign investors sold a net total of RM29.7 million Malaysian equities last week, a reversal from RM460 million net purchase a week earlier, according to MIDF Research.
In his Fund Flow report yesterday, MIDF Research head of equity Syed Mohammed Kifni Syed Kamaruddin said global funds’ aversion to Malaysian equities returned after a respite of merely one week.
He said that in the fourth quarter of this year, the local bourse has thus far witnessed only two weeks of foreign fund inflows.
Syed Muhammed said foreign investors were net sellers on each day except for Monday and Wednesday last week.
“We saw the buying intensity from the previous week spill over into Monday trading as RM122 million net foreign funds entered our bourse.
“However RM53 million net selling pressure emerged on (last) Tuesday and pent-up buying worth RM45 million resurfaced the day after.
Thenceforth, selling margin re-emerged at negative 50 million last Thursday before it jumped further to minus RM94 million on (last) Friday,” he said.
He said on a cumulative basis, foreign investors remained net sellers of Malaysian stocks in 2014.
He said the net outflow as at last Friday had increased to RM3.72 billion. In 2013, Malaysia reported a net inflow of RM3.03 billion.
Syed Muhammed said the foreign participation rate eased last week. He said the daily average gross purchase and sale declined to RM900 million from RM967 million recorded in the previous week.
Nonetheless, the local participation rate is rising, he said.
“In the retail market, the average daily gross purchase and sale increased to RM900 million. In tandem with the higher participation rate, local retailers were net buyers for last week. Meanwhile, local institutions’ participation rate increased to RM2.4 billion last week. However, they continued to be net sellers for the second week in a row,” he said.
Commenting on the region, Syed Muhammed said the flow into Asian equities continued last week as global funds made a general return for the third week in a row.
“Nonetheless, the rate of inflow is showing signs of ebbing. Uncertainty over the pending verdict as well as the reaction to the outcome of the high-profile trial of an opposition leader may have perturbed some foreign investors and resulted in a slight net foreign liquidity outflow from Malaysia last week,” he said.
This article first appeared in The Edge Financial Daily, on November 11, 2014.