KUALA LUMPUR (Nov 4): Foreign buying of local equities on Bursa Malaysia shrank to RM55.2 million last week, from RM302.4 million net in the preceding week, according to MIDF Amanah Investment Bank Bhd Research.

In his weekly fund flow report today, MIDF Research’s Adam M Rahim said support came from the rally on Wall Street overnight with the S&P 500 index hitting a record high amidst positive signs of trade talks and better-than-expected corporate earnings.

“Foreign net buying activity took a breather on Wednesday as international funds disposed [of] RM18.2 million net ahead of the US Federal Reserve’s policy decision.

“Risk-on sentiment was also dampened by fresh concerns on the 'phase one' trade deal between the US and China which may not be ready for signing in mid-November 2019,” he said.

Adam said the level of foreign net selling then accelerated substantially to hit RM117.7 million on Thursday following the third rate cut by the US Federal Reserve.

He said regional peers such as Thailand and Indonesia also saw foreign net outflow on the same day but at a stronger momentum.

Nevertheless, Adam said foreign investors made a comeback on Friday, accumulating RM51.7 million net of local equities.

“Investors cheered the better-than-expected China manufacturing data in October 2019 which was the highest in almost three years with new orders rising at the quickest pace since January 2013.

“The month of October 2019 saw a total foreign net outflow of RM484.6 million, the second lowest monthly foreign net outflow so far for the year,” he said.

Meanwhile, Adam said on a year-to-date basis, foreign funds have taken out RM8.38 billion of local equities from Malaysia, making up 72% of last year’s total foreign outflow of RM11.69 billion.

He said in terms of participation, foreign investors saw the largest increase in average daily traded value (ADTV) of 28.9% to reach the RM1 billion mark.