This article first appeared in The Edge Financial Daily on October 22, 2019

KUALA LUMPUR: Offshore investors modestly returned to Bursa Malaysia last week after four straight weeks of selling, said MIDF Research.

In its weekly fund flow report yesterday, MIDF Research analyst Adam Mohamed Rahim said foreign investors snapped up RM184.6 million net of local equities last week, compared with RM276.6 million net in the previous week.

So far this month, foreign funds have taken out RM790.4 million net of local equities from Bursa.

Year to date, international investors have taken out RM8.69 billion of local equities — 74.3% of last year’s foreign net outflow of RM11.69 million.

Of 42 weeks, Bursa has seen 14 weeks of foreign net buying in 2019, Adam noted.

“Bursa saw a moderate foreign net outflow of RM10.7 million last Monday supported by positive sentiments from the agreement between Washington and Beijing on the outlines of a partial trade accord and also the recently tabled Budget 2020 in the preceding week.

“Foreign net selling inched higher to RM21.3 million last Tuesday as investors searched for further signs of a concrete trade deal to sustain their optimism,” he said.

He added that foreign funds bought RM187.1 million net of local equities last Wednesday — the highest during the week.

“The local bourse followed suit to close 0.6% higher at a two-week high of 1,574.9 points. Investors cheered China’s US$28 billion (RM117 billion) cash injection into its financial system, while Hong Kong unveiled measures to bolster growth.”

Adam said offshore funds continued to enter Bursa last Thursday at RM107.9 million net despite weak US retail sales that added to expectations of interest rate cuts by the US Federal Reserve.

“The mood turned sombre last Friday as foreign investors sold RM78.3 million net following China’s slowest economic expansion in nearly three decades on weaker investments and factory output.”

In terms of participation, he said foreign investors saw the largest increase in average daily traded value of 43.6% to breach the RM1 billion mark for the first time in four weeks.

Globally, most equity markets were in the black for the week ended last Friday despite weak economic data from China and US retail sales.

“International investors upped the ante in acquiring equities in Asian markets.

“Based on the provisional aggregate data for the seven Asian exchanges that we track, investors classified as ‘foreign’ mopped up US$2.51 billion net last week, more than 100 times compared with  US$13.3 million net bought in the preceding week,” Adam said, noting this was also the highest weekly foreign net inflow for Asian markets in 24 weeks.