KUALA LUMPUR (March 27): Foreign investors purchased RM1.08 billion worth of equities on Bursa Malaysia last week, the second week running the amount had exceeded RM1 billion. This excluded off market deals.

In its weekly fund flow report today, MIDF Research noted that foreign investors have now been net buyers on Bursa for seven consecutive weeks. As of Friday, foreign net buying had extended for 11 trading days.

"So far, the month of March has recorded a cumulative foreign net purchase of RM3.23 billion. With five trading days left in the month, it is already higher than the RM956 million (recorded) in February and is the highest since March last year," said the research firm.

MIDF Research believes that the strong foreign buying momentum is reflected by the fact that when equity market around the globe retraced significantly on Wednesday, foreigners continued to pick up Malaysian shares.

"The global retracement on Wednesday was spurred by concerns arising ahead of the U.S. Republican’s healthcare vote on Thursday, which was eventually withdrawn," it added.

MIDF Research said the foreign average daily trade value (ADTV) stood at to RM1.26 billion, the second highest this year.

"The strong foreign buying momentum continues to enable local investors to lighten their position. Year-to-date, local fund managers have disposed RM3.86 billion net," it noted.

The retail market also remained vibrant last week, as retail ADTV increased by 1.3% to RM1.26 billion, compared to the week before, marking the third week in a row it exceeded RM1 billion.

Meanwhile, the lacklustre performance of U.S. equities put some pressure on Asian markets last week, as Asian shares retreated from a 21-month high. Japan’s Nikkei index performed the worst among its Asian peers, with a decline of 1.33% on a Friday-to-Friday basis.

MIDF Research said Nikkei’s weak performance also coincided with the news of Japanese Prime Minister Shinzo Abe and his wife being accused of giving cash to an ultra-nationalist school at the centre of a real estate scandal, which involved the school.

However, Malaysia's FBM KLCI remained above 1,740 points for the whole of last week. On Tuesday, the KLCI reached 1,754 points, the highest since May 2015, following the strong performance in most regional stock indices.

Nevertheless, the flow of global money into Asian equity remained strong last week. Foreign investors purchased equity in the seven Asian markets that we track amounted to US$1.97 billion, the third highest in a week this year. "The buying was almost across the board, with the exception of that for the Philippines," said MIDF Research.