KUALA LUMPUR (July 15): Foreign buying of Malaysian equities on Bursa Malaysia narrowed to RM84.9 million last week, from RM230.2 million the prior week, according to MIDF Amanah Investment Bank Bhd Research.

In his weekly fund flow report today, MIDF Research's Adam M Rahim said it was a slow start to the week as offshore funds only snapped up RM15.9 million net of local equities on Monday.

"Sentiment on Monday was moderated by increasing uncertainty over the outcome of the upcoming Federal Reserve policy meeting as latest US payroll report signalled that the American economy remains on track.

"Despite the drag on Monday, Malaysia bucked the trend as other regional peers namely South Korea, Taiwan, Thailand, India, the Philippines and Indonesia experienced foreign net outflows," he said.

Adam said Tuesday then saw a spike of foreign net buying which reached RM104.6 million net, the highest during the week, coinciding with Bank Negara Malaysia's decision to keep the benchmark interest rate unchanged.

He said the level of foreign net inflows tapered by more than half on Wednesday and Thursday to RM42.5 million and RM51.2 million as international funds moved to the sidelines, awaiting clues about interest rates direction from Federal Reserve Chairman Jerome Powell's congressional testimony.

"The four-day buying streak was snapped on Friday as foreign funds offloaded RM129.3 million net.

"Much of the selling activity was spurred by the potential earnings dilution of CIMB Group Holdings Bhd following the proposed issuance of exchangeable bonds by Khazanah Nasional [Bhd].

"Last week's foreign net inflow brings the year-to-date foreign net outflow from Malaysia to RM4.35 billion," he said.

Adam said that in contrast, the other six Asian markets MIDF Research monitors (Korea, Thailand, Indonesia, India, Taiwan and the Philippines) have seen a foreign net inflow so far for the year, with India being the largest.

He said strong participation was only seen amongst foreign investors, which recorded a 10.6% increase in average daily traded value (ADTV) to RM985.9 million, nearing the healthy level of RM1 billion.