KUALA LUMPUR (Sept 28): Malaysia succumbed to the heavy tide against emerging markets last week, and what had been hoped to be a promising, sustainable turnaround in the week before turned out be ephemeral, according to MIDF Research

In his weekly fund flow report today, MIDF Research head Zulkifli Hamzah said investors classified as foreign sold heavily on Bursa last week, offloading RM1.27 billion net in the open market despite it being a holiday-shortened week.

He said it was only the fifth week this year that the amount had exceeded RM1 billion.

Zulkili said that more than reversed the amount of inflow recorded in the preceding week of RM685 million, implying that any fund making its way to Malaysian equity currently is highly volatile in nature.

He said the outflow last week was clearly driven by apprehensions over emerging markets as a whole.

“The writings were already on the wall on Monday as foreigners pulled out RM333.9 million net, the highest in 17 days and also coincidentally the 17th time that the amount had exceeded RM300 million this year.

“On Wednesday, the situation turned rough as foreign investors sold a whopping RM546.6 million. That was the highest recorded in a single day this year, and only the second time it exceeded RM500 million since the beginning of 2014,” he said.

Zulkifli said selling remained heavy on Friday, which was rather ominous for the market this week.

He said for 2015, last week’s attrition raised the cumulative net foreign outflow to RM17.7 billion, significantly surpassing the RM6.9 billion outflow for the entire 2014.

Zulkifli said foreign participation rate was easier but stayed elevated last week.

He said the average daily gross volume was RM1.08 billion, compared with RM1.51 billion the week before.

He said that on Wednesday, the volume was only RM1.24 billion despite the high net sale amount.

“Local institutions supported the market, mopping up RM1.12 billion net on RM2.17 billion participation rate.

“Interestingly, retailers bought rather heavily, mopping RM145 million, the highest in a week this year,” he said.

He said although participation stayed moderate at RM704 million, many retail investors were seeing value at current market level.