KUALA LUMPUR: Foreign investors sold RM587.2 million of Malaysian equities in the first six trading days of this year on Bursa Malaysia, according to MIDF Research. This was higher than in the corresponding period in 2014 of RM497.2 million.
In his weekly fund flow report yesterday, MIDF Research head Zulkifli Hamzah said after six trading days into 2015, the writing on the wall was not so auspicious for Malaysia, although he would not interprete it as being ominous.
Zulkifli said the net sale by foreigners had already broken the RM200 million mark last Tuesday.
He said in 2014, there had been 23 days during which the daily net sale exceeded the threshold.
“On a slightly positive note, foreign funds turned net buyers last Friday, albeit marginally to the amount of RM24.2 million.
“We note that foreign participation surged last week to RM1.1 billion. It was the first time in three weeks that the daily average gross purchase and sale surpassed the RM1 billion mark, which we deem as active,” he said.
Zulkifli, however, said foreign volume peaked last Wednesday and had retreated thereafter.
He said local institutional investors supported the market last week, mopping up RM433.3 million, but it was not aggressive as participation rate was less than RM2 billion at RM1.9 billion.
He said the average institutional participation rate was RM2.3 billion in 2014.
Zulkifli said local retailers appeared to be rather sanguine, mopping up RM101.9 million, the first buying in four weeks.
“However, only the brave ones appear to be dabbling in the market as the participation rate was only RM580 million. The average in 2014 was RM873 million,” he said.
Zulkifli said that regionally, after the first six trading days of this year, it was apparent that the various equity markets were diverging.
He said Wall Street, the global bellweather market, may be looking at a profit-taking year, after the record-breaking 2014.
Zulkifli said the early pacers this year had all been from Asia, with the Philippines and Thailand in the lead hitting the ground running.
“However the flow of fund data suggests that global investors are still in the process of forming their conviction towards Asia for 2015.
“Trading in the first six days suggested that after early hesitations, foreign investors appear to be giving Indonesia the vote of confidence with strong inflow last Friday.
“The Philippine market is still on investors’ radar screen, even after the PSEi index has risen for six years in a row,” he said.
This article first appeared in The Edge Financial Daily, on January 13, 2015.