KUALA LUMPUR (July 8): Foreign fund buying of stocks listed on Bursa Malaysia rose to RM230.2 million last week, from RM171.7 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 the week started off on the right foot as international funds acquired RM114.38 million net of local equities on Monday.
"Risk appetite on Monday was bolstered by the agreement between the US and China to resume trade negotiations during the G20 summit in the preceding week," he said.
Adam said despite more tariffs being proposed by the US on US$4 billion worth of goods from the European Union, foreign net buying activity intensified on Tuesday to reach RM143.8 million net, a level not seen since June 3, 2019.
He said this was in conformity with other regional peers, namely Thailand and Indonesia.
"The local bourse followed suit to rise 0.4%, cancelling off its year-to-date loss for the first time since March 18, 2019.
"On Wednesday, the level of foreign net buying activity slowed down substantially to RM12.6 million net but marked the sixth straight day of buying spree," he said.
Adam said trade optimism waned as investors were concerned about a trade dispute, this time between Korea and Japan.
"Tables were turned on Thursday and Friday as foreign funds took out RM17.4 million net and RM23.3 million net of local equities respectively as investors locked in gains while economic data showed that Malaysia's exports growth doubled to 2.5% year-on-year (y-o-y) in May 2019 from 1.1% y-o-y April 2019.
"Last week's foreign net inflow brings the year-to-date foreign net outflow from Malaysia to RM4.43 billion," he said.
Meanwhile, Adam said the other six Asian markets MIDF Research monitors (Korea, Thailand, Indonesia, India, Taiwan and the Philippines) have seen foreign net inflow so far for the year.
He said that in terms of participation, the average daily traded value (ADTV) of foreign investors experienced a decline of 13.7% to RM891.6 million for the week, below the healthy threshold of RM1 billion.
"Meanwhile, both retail investors and local institutional funds recorded an increased in their ADTV by more than 20% for the week," he said.