Friday 29 Mar 2024
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KUALA LUMPUR (Nov 23): Investors classified as foreign funds sold RM320.1 million, net of purchases, in the open market last week, after offloading RM714 million in the preceding week, according to MIDF Research.

In his weekly fund flow report, MIDF Research head Zulkifli Hamzah said foreign trade in the aftermath of Paris was ominous as expected.

He said that on Monday, foreign funds sold RM219.1 million, the 52nd day this year that the deficit exceeded RM200 million.

“The selling cannot be entirely attributable to Paris as sentiment leading up to the tragedy was already fragile and foreign funds were already in a selling mood.

“In the Friday prior, foreign funds had offloaded a whopping RM322 million,” he said.

Zulkifli said foreign selling continued on Tuesday and Wednesday but on a much slower pace.

He said that by Thursday some foreign investors were back nibbling in the market but the selling resumed on Friday albeit only RM92 million.

He explained that for 2015, last week’s attrition increased the cumulative net foreign outfl ow to RM18.5 billion, compared with the RM6.9 billion outflow for the entire 2014.

“We estimate the overhang of foreign liquidity for money that came in since early 2010 to be less than RM10 billion, at only RM9.4 billion.

“In other words, foreign presence in the local equity market is currently very low,” he said.

Zulkifli said MIDF Research warned a few weeks ago that the market was entering a period of low activity, which is a common phenomenon in November and December.

“Last week, foreign participation (i.e the average daily gross volume) dropped to RM823 million, and remained below the RM1 billion mark for the fourth consecutive week.

“Local institutions supported the market passively buying RM322 million. However, participation rate dropped to RM2.16 billion, the lowest in seven weeks,” he said.

Zulkifli said he detected edginess in the retail market as there were profit taking in some small cap stocks.

“However, buying support was present and that made the retail market rather vibrant.

“Retailers were only marginal sellers last week at RM1.9 million. But participation rate surged to RM955 million, the second highest in 2015!” he said.

 

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