KUALA LUMPUR (Jan 22): Foreign funds acquired RM417.3 million of Malaysian equities last week – the highest inflow recorded since September 2018, according to MIDF Research.

So far in 2019, foreign funds bought RM424.5 million net or US$103.4 million net of local equities, it added.

"In comparison to the other three Asean peers we monitor, namely the Philippines, Indonesia and Thailand, Malaysia has the lowest foreign net inflow on a year-to-date basis," its analyst Danial Razak said in MIDF Research's weekly fund flow report today.

Danial pointed out that foreign investors turned buyers after a short selling mode on Monday, ending the week ended Jan 18, 2019 with net positive.

"Based on the preliminary data from Bursa Malaysia, international funds acquired RM417.3 million, net of local equities last week, about 16 times the net inflow in the previous week.

"Foreign investors turned buyers starting in the last two weeks, after nine consecutive weeks as sellers," Danial said.

He noted that foreign investors first bought RM51.7 million net on Tuesday followed by a net total of RM378 million for the rest of the week.

"The net buying quantum peaked on Friday, on renewed trade optimism. It was reported by the Wall Street Journal that the US is considering measures to roll back tariffs on Chinese products, which helped to offset the fears of a global economic slowdown after disappointing Chinese trade data. Notably, Chinese exports and imports recorded a drop in December, stemmed from the trade war impact," he added.

Despite the inflows into Bursa, Danial said participation rate among the various group of investors recorded a decline across the board. Foreign average daily traded value (ADTV) dipped 20.7% to settle below the RM1 billion level. Meanwhile, the retail market's and local institutions' ADTV followed suit, recording declines of 14.9% and 17% respectively.

On a positive note, the retail market’s ADTV still remains above its healthy level of RM800 million, he added.

Regionally, Danial said in the four emerging Southeast Asian markets that MIDF Research monitors, all markets saw a weekly net inflow of foreign funds last week.