Foreign buying of local equity shrank to RM29.4 million last week, says MIDF Research

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KUALA LUMPUR (Jan 28): Foreign buying of local equity on Bursa Malaysia shrank to RM29.4 million last week, from RM320.9 million in 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 Bursa started the week on the wrong foot as international funds took out RM47.5 million net of local equities on Monday amidst political turbulence in Libya.

“Nevertheless foreign net selling activity was short-lived as  foreign funds entered Bursa at a tune of RM49.0 million net on Tuesday.

“Foreign net buying activity gained more momentum on  Wednesday to reach RM60.6 million net as Bank Negara Malaysia cut its overnight policy rate by 25 basis points to 2.75% to support economic growth in 2020,” he said.

Adam said offshore investors later took a breather from buying local equities, selling RM38.5 million net on Thursday amidst mounting concerns over the coronavirus outbreak.

He said Friday saw a decent amount of foreign net inflow worth RM5.9 million net although markets were only operating for the first half of the day before closing for the long weekend.

“Meanwhile, the World Health Organisation declared that the coronavirus has not yet become a global health emergency despite concluding it to be a local emergency in China.

“With a week left before January ends, January 2020 has seen a foreign net inflow of RM521.4 million,” he said.

Adam said in comparison to the other three ASEAN markets that MIDF Research tracks, Malaysia has the smallest foreign net inflow on a year-to-date basis after Indonesia while Thailand and the Philippines have been recording foreign net outflows.

“In terms of participation, the average daily traded value (ADTV) of foreign investors decreased by 24.4% year-on-year during the week, the only decliner amongst other investor groups.

“In addition, the ADTV was still below the healthy level of RM1.0 billion at RM674.6 million,” he said.