KUALA LUMPUR: Relatively heavy foreign selling of Malaysian equity continued for the third week in a row for the week ended last Friday, according to MIDF Research.

In his weekly fund report yesterday, MIDF Research head Zulkifli Hamzah said foreign investors sold equity listed in the open market on Bursa Malaysia amounting to RM537.7 million on a net basis last week, compared with RM460.4 million the week before.

He said foreign selling was heavy in the first three days, peaking last Tuesday when RM223.5 million was offloaded, the 13th day this year that the amount had exceeded RM200 million.

“However, we note that foreign investors turned net buyers last Friday, although the amount bought was only RM72 million. Prior to [last] Friday, foreign investors had been selling for seven straight days,” he said.

Zulkifli noted that in the last two weeks, foreign investors had offloaded RM1.58 billion in the open market.

This has increased the cumulative net foreign outflow this year to RM4.2 billion.

In comparison, the cumulative foreign outflow for the entire 2014 was RM6.93 billion, he said.

Zulkifli said foreign participation on Bursa declined last week, after two weeks of elevated trading.

He said the daily average gross purchase and sale fell below RM1 billion to RM901 million.

“Retail investors retreated from the market again, after nibbling the week before.

“Retailers sold RM137.9 million last week, but most of the selling was recorded last Friday, when Malakoff was listed.

“Participation rate remained depressed at RM644 million, among the lowest this year. Risk aversion is still very high among retail investors,” he said.

Zulkifli said for the third week in a row, local institutions supported the market strongly.

Local institutions absorbed RM675.6 million last week, the fourth highest in a week this year.

He said participation rate was still elevated at RM2 billion.

Zulkifli said local institutions have absorbed RM5.36 billion net so far this year. Last year, they mopped up RM8.18 billion net.

On the regional markets, Zulkifli said global equity prices demonstrated a commendable degree of resilience last week.

He said the focus was more towards the bond market, where prices of sovereign debt securities had slumped in the last few weeks.

This article first appeared in The Edge Financial Daily, on May 19, 2015.