Foreign funds bought RM86.3m local equity last week, says MIDF Research

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KUALA LUMPUR (March 25): Foreign funds acquired RM86.3 million of Malaysian equity on Bursa Malaysia last week compared to dumping RM421 million the prior week, said 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 a strong note as foreign investors bought RM81.5 million net, the largest in a day since Feb 18, 2019.

"The influx of foreign funds on Monday lifted the FBM KLCI by 0.6% to its highest close in 10 trading days at 1,691 points.

"International funds continued entering the Malaysian market to a tune of RM20.6 million net on Tuesday coinciding with Brent crude oil price consistently remaining near the US$67 per barrel level following OPEC's commitment to resume output cuts 2019.

"However, global funds shifted to the sidelines on Wednesday ahead of the US Federal Reserve meeting, resulting in a foreign net outflow of RM26.6 million," he said.

Adam said another concern which surrounded markets on Wednesday was the possible pushback of China against the US's demands even as US President Donald Trump cited that talks are going well.

"Notwithstanding this, Malaysia attracted a bout of foreign net inflows worth RM14.6 million on Thursday as the Federal Reserve implied that it would halt interest-rate increases this year and pivot away from policy tightening.

"The ringgit followed suit to appreciate by 0.12 to an eight-month high of USD/RM4.061, the strongest since late July last year," he said.

Adam said a measurable pace of foreign net selling was seen on Friday worth RM3.9 million following the release of Malaysia's consumer price index, which contracted by 0.4% year-on-year for the second month in February 2019, continuing a deflationary trend.

"The weekly foreign net buying last week has pared the month-to-date foreign net outflow in March to RM1.40 billion. Malaysia's year-to-date foreign net outflow of RM1.19 billion or US$292.7 million is no longer the highest amongst the four ASEAN markets we monitor as Thailand took the spot with a year-to-date foreign net outflow of US$349.4 million or above RM1.40 billion," he said.