This article first appeared in The Edge Financial Daily on October 30, 2019

KUALA LUMPUR: Foreign investors’ net purchase of Malaysian shares amounted to RM302.4 million last week, after they bought RM2.28 billion worth of local equities last week and sold RM1.98 billion, according to MIDF Amanah Investment Bank Bhd yesterday.

In comparison, foreign investors’ net purchase of Malaysian shares amounted to RM184.6 million in the preceding week, MIDF’s Adam M Rahim said in his weekly fund flow report.

“With three trading days left in October, foreign funds have sold RM488 million net of local equities during the month. On a year-to-date basis, the foreign net outflow from Malaysia stands at RM8.39 billion,” Adam said.

Bursa Malaysia, he said, started the week on a rather sluggish note as international funds disposed RM23.7 million net of local equities last Monday as hopes of further stimulus measures from China were trimmed by China’s move of keeping its benchmark lending rate unchanged.

“Tables were turned [last] Tuesday as foreign funds acquired RM217.6 million net of local equities, the largest in a day since early June. The local bourse followed suit to settle at 1,574.1 points on the same day, the highest close during the week.

“Positive vibes were sparked by indications from China that negotiations over an initial trade deal are progressing, raising the possibility that both nations’ leaders could sign an agreement at a meeting next month in Chile,” Adam said.

Last Wednesday, the level of foreign net buying of Malaysian shares declined substantially to RM1.7 million as British lawmakers rejected the government’s proposed timetable for passing legislation to ratify its deal to exit the European Union, MIDF said. According to MIDF, such sentiment had put the Oct 31 Brexit deadline in doubt.

“Nevertheless, foreign investors significantly increased their exposure on stocks listed on Bursa later on [last] Thursday shown by a foreign net inflow of RM117.0 million. Risk-on sentiment was bolstered by the potential amicable resolution to the growing palm oil trade tensions between India and Malaysia.

“International funds turned net sellers on [last] Friday ahead of the long weekend albeit at a measurable pace of only RM10.3 million,” MIDF said.

Regionally, Asian markets had a cheerful week as international funds continued pouring into Asian equities for the second week. “Based on the provisional aggregate data for the seven Asian exchanges that we track, investors classified as ‘foreign’ mopped up US$1.81 billion (RM7.56 billion) net last week, compared with US$2.52 billion in the preceding week,” Adam said.

Meanwhile, the majority of equity markets worldwide were in the black last week amid some surprises in corporate earnings in the US, like Tesla’s profitable third quarter results, he noted.

As for Bursa, the FBM KLCI’s weekly gain was short-lived as it ended 0.1% lower for the week after settling at 1,570.0 points last Friday, he added.