KUALA LUMPUR (Nov 27): International investors bought RM88.6 million net of Malaysian equities last week, the highest weekly inflow recorded since the week ended September 15, according to MIDF Amanah Investment Bank Bhd Research.
In his weekly fund flow report today, MIDF Research’s Adam M Rahim however said this was insufficient to offset the attrition in the preceding week which amounted to RM297.1 million net.
“Last week, foreign investors were net buyers in 2 out of 5 trading days. Foreign buying was the strongest on Wednesday which amounted to RM214.5 million net.
“This was the highest amount bought in a day since May 11, coinciding with the FBM KLCI closing at a six-day high of 1,723 points, tracking gains from Wall Street’s tech rally overnight.
“We note that the foreign inflow on Wednesday was in conformity with most Asian peers,” he said.
Adam however said risk-on mood was hampered after Chinese shares tumbled following a major bond selloff which saw the foreign net inflow into Bursa hitting below RM10 million net on Thursday.
He said negative sentiment on Bursa was further fuelled on Friday by the removal of certain index-heavyweights such as Digi.Com Bhd from the list of Shariah compliant securities.
“As a consequence, foreign investors disposed RM62.4 million net on Friday,” he said.
Adam said that year-to-date, foreign investors have mopped up RM9.10 billion worth of local equity.
He said with three successive months of foreign attrition seen so far in 2017, November is expected to be another month of attrition underpinned by what we call the election effect.
He said foreign participation decreased substantially last week as the foreign average daily trade value (ADTV) eased by 24% to RM856 million.
“The retail market followed suit as the retail ADTV declined by 12%,” he said.