Thursday 28 Mar 2024
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KUALA LUMPUR (Sept 13): Bursa Malaysia saw a small foreign tide-in of RM29.6 million last week after investors classified as foreign offloaded RM193.1 million worth of stocks in the prior week, says MIDF Equities Research.

"Foreigners were net buyers ahead of Bank Negara’s meeting to decide on the overnight policy rate," according to the research outfit in its weekly fund flow report today. 

"On Monday, they bought RM21 million and on Tuesday they increased their purchase to RM174.4 million," according to the research firm. 

However, it noted that foreigners took profit after the central bank announced to leave the OPR unchanged at 3%, selling RM9.7 million worth of stock on last Wednesday. 

"They returned as net buyers on Thursday, purchasing RM20.3 million but sold RM176.4 million on Friday," it noted in its fund flow report for the week ended Sept 9. 

MIDF Research explained that the heavy selling by foreign investors last Friday was partly due to the tighter-than-expected monetary policy by the European Central Bank (ECB), and heightened prospects of a US rate hike towards end of the week.

"They also locked in part of their profits ahead of the long weekend as Bursa Malaysia was closed on Monday to celebrate the Hari Raya Haji," it said. 

As of last Friday, the year-to-date cumulative net foreign inflow into shares listed on Bursa increased to RM2.37 billion versus RM2.34 billion a week ago.

"In retrospect, foreigners had offloaded RM19.5 billion in 2015 and RM6.9 billion in 2014," it said, adding foreigners’ participation rate decreased to RM620.96 million from RM1.08 billion a week earlier.

MIDF Research observed that both local and foreign funds were net buyers last week -- for the first time this year -- as both categories of investors bought RM114.4 million and RM29.6 million respectively. 

Local institutions, it said, continued buying for the second week although at a lower pace of RM114.4 million against RM177.8 million in the preceding week.

Prior to that, they had been selling every week since July 8. 

However, in terms of local funds' participation rate, by volume, it declined further to RM1.82 billion. 

Retailers, on the other hand, turned net sellers last week after selling RM144 million worth of stock after being net buyers for three successive weeks previously.

"The quantum of selling by retailers was the highest since March. Meanwhile, their participation rate saw the fourth consecutive decline," it added. 

Retailers’ participation was also on the decline; it slid to RM551.8 million from RM602 million a week earlier. 

Regionally, MIDF Research said foreigners increased the buying in Asia to US$1.49 billion after starting the first week of September with a weak inflow of US$66.4 million. The Philippines and Indonesia were the only countries with a net outflow during the week

Globally, stock markets staged a small rally after weaker-than-expected US job data but retreated on tighter monetary policy prospects.

The four-day climb was on relief of a less likely September US rate hike paused on Thursday as investors look to ECB for its monetary policy, which was tighter than expected.

Brent crude rebounded by 2.52% to US$48.01 per barrel in one week as traders digest the deal between Saudi Arabia and Russia while keeping an eye on the inventory level.

Ringgit rebounded on Wednesday after Bank Negara maintained the overnight policy rate at 3%, but pared some of the gains later to end the week down 0.42% at US dollar/MYR4.07 as US rate hike looms again. 

 

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