KUALA LUMPUR (Oct 26): Foreign funds bought an aggregate RM230.4 million, net of sales, in the open market in the last five trading days, according to MIDF Research.

In his weekly fund flow report today, MIDF Research head Zulkifli Hamzah said it was lower than the RM411.7 million the week before, but understandable in view of the anxiety ahead of the Budget and the trend observed elsewhere in Asia.

He said that after buying for eight straight trading days, foreign funds turned net sellers on Monday.

“It was expected as buying momentum had been tapering in the preceding Thursday and Friday.

“However, the amount was not sizeable, only RM8.1 million. The outflow grew in size on Tuesday, but the deficit was overturned on Wednesday as foreigners were back picking up bargains,” he said.

Zulkifli said it was evident that developments in China had disrupted the short-term flow of fund dynamics in Asia.

He added that funds were being drawn to Greater China at the expense of Emerging Asia.

“Ahead of Budget 2016, foreign funds turned net sellers again on Thursday.

“On Budget day, Emerging Asia regained favour, coinciding with the ECB’s fresh QE commitments. That translated into a big win for Bursa, as foreign buyers mopped up RM296.5 million, the fifth highest in a day this year,” he said.

Zulkifli said that for 2015, last week’s buying reduced further the cumulative net foreign outflow to RM16.9 billion, compared with the RM6.9b outflow for the entire 2014.

He said foreign ownership as a percentage of market capitalisation on Bursa was 22.2% at the end of September, the lowest since October 2011.

Zulkifli said foreign participation rate was maintained at an elevated level.

He said the average daily gross volume exceeded RM1 billion for the sixth consecutive week, at RM1,009 million.

“Trading was listless on Monday and Thursday, but the foreigners came back in droves on Friday.

“For the third consecutive week, local investors took opportunity of foreign buying to offload some position. Local institutions sold RM154.4 million on RM2.19 billion participation rate,” he said.

Zulkifli said retail investors continued to withdraw from the market, selling RM72.0 million last week.

He said trading volume rose slightly but remained moderate, averaging RM859 million.