KUALA LUMPUR (July 1): Foreign funds acquired RM171.7 million net of local equities last week on Bursa Malaysia, up from RM28.3 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 this was six times more than the amount bought in the week before.
"The first two days of the week saw international funds selling equity on Bursa but at a moderate level below RM25 million net.
"Risk aversion was stoked by Iran's comments that there is no more room for a diplomatic solution with the US following the imposition of new sanctions," he said.
Adam said international investors on Wednesday made a commendable return as they bought RM73.1 million net of local equities despite comments of Federal Reserve Bank of St. Louis which downplayed the need for aggressive US monetary easing.
He said on Thursday, the level of foreign net buying tapered slightly to RM53.8 million.
Adam said the dampened sentiment came from the news that substantial additional tariffs would be placed on goods on China by the US if no progress is made on a trade deal when both sides meet at the G20 meeting.
"Bursa saw the highest foreign net inflow during the week of RM83.7 million on Friday ahead of the highly anticipated US-China presidential meeting on Saturday.
"This was in contrast to other regional peers, namely Thailand, the Philippines and Taiwan which experienced foreign net outflows exceeding RM40 million," he said.
He said for the month of June 2019, foreign investors have acquired RM134.6 million net, the first foreign net inflow in five months.
"On a half yearly basis, the foreign net outflow from Malaysia stands at RM4.66 billion, which is lower than the RM6.8 billion foreign net outflow seen during the same period last year.
"While foreign investors continued entering Bursa, foreign investors emerged as the investor group with the largest decline in terms of average daily traded value (ADTV) of 28.6% to RM1.03 billion," he said.
Nevertheless, he said level of participation in three weeks is still deemed healthy as it exceeds RM1 billion.