KUALA LUMPUR (June 22): After heavy foreign selling three weeks in a row, the outflow appears to be ebbing, according to MIDF Research.

In his weekly fund flow report, MIDF Research head Zulkifli Hamzah however said that foreign investors have now been net sellers on Bursa for eight consecutive weeks.

He said that last week, investors classified as “foreign” sold equity listed in the open market on Bursa amounting to RM372.4 million on a net basis.

He said this was a significant drop from the RM852.7 million sold the week before.

Zulkifli said the decline in the intensity of selling was reflected by the fact that foreign investors turned net buyer of Wednesday.

“Although the amount was marginal at only RM14 million, it was the first buying in 22 trading days.

“Nevertheless, it would have been naive to jump into conclusion that the trend is reversing. As it turned out, foreign selling resumed on Thursday and on Friday, the withdrawal surged to RM196.2 million, the highest in six trading days,” he said.

Zulkifli however said that daily selling had been capped below RM100 million on Monday, Tuesday and Thursday.

“This is further evidence that the intensity of selling is ebbing.

“The week ahead is particular crucial as it remains to be seen whether the momentum of last Friday’s sudden surge in selling will follow through,” he said.

Zulkifli said that last week’s selldown increased the cumulative net foreign outflow in 2015 to RM7.9 billion, surpassing the RM6.9 billion outflow for the entire 2014.

He said foreign participation (daily average gross purchase and sale) rose 21% to RM1.02 billion, but much of it was due to the surge in volume on Friday.

“Local institutions were passive in mopping up only RM315.3 million last week although participation rate rebounded to RM2.03 billion.

“Retailers were still on the sideline although opportunists bought RM57 million on still depressed average daily volume of RM621 million,” he said.