KUALA LUMPUR (Jan 19): Foreign money outflow from the Malaysian equity market last week surged to its highest level since August 2013, according to MIDF Research.

In his weekly fund flow report Monday, MIDF Research headof equity Syed Muhammed Kifni said that last week, investors classified as foreign offloaded local equity in the open market (i.e excluding off-market deals) amounting to RM1.42 billion.

He said that was the highest since the last week of August 2013, and the second time in six weeks that money outflow exceeded the RM1 billion mark.

Syed Muhammed said foreign investors were net sellers every single day last week.

He said the selling peaked on Wednesday, when a net amount of RM413.1 million was offloaded.

He said foreigners had not sold more than RM400 million in a single day in the open market since Feb 4, 2014.

“Indeed, the amount sold in the last three trading days exceeded RM300 million per day, a level of intensity that Bursa had not experienced in 2014.

“For the year to Jan 16, the cumulative net outflow had already exceeded the RM2 billion mark at RM2.003 million,” he said.

Syed Muhammed said that was about 30% of the total outflow recorded in 2014.

He said the foreign selldown on Bursa was happening amid heightened level of participation.

Syed Muhammed said foreign participation rate (daily average gross purchase and sale) surged to RM1.14 billion, the second week in a row that the amount exceeded RM1 billion.

He said the average daily foreign participation rate in 2014 was RM980 million.

Syed Muhammed explained that local institutions supported the market aggressively last week, mopping up RM1.34 billion net.

“The participation rate was also elevated at RM2.2 billion.

“Local retailers were cautious last week, buying only RM75 million net. Most retail investors were still on the sideline although participation rate climbed to RM756 million. That was even lower than 2014’s average of RM873 million,” he said.

Commenting on the region, Syed Muhammed said the flow out of Asian equity continued on last week as global funds made a general retreat for the second week in a row.

Nevertheless, he said the rate of net outflow for the week was rather measured at less than one-and-a-half billion dollars thanks to a strong reversal into India.

“A surprise rate cut by the Indian central bank last week provided a big boost for its stock market and sent key indices higher.

“For Malaysia, it was a week to remember but for the wrong reason,” he concluded.