KUALA LUMPUR: Institutional investors flocked back to the stock market after the Chinese New Year break, but retailers stayed on the sidelines during the week ended last Friday, according to MIDF Research.

In his weekly fund flow report yesterday, MIDF Research head Zulkifli Hamzah said while foreign investors may be making a comeback to Bursa Malaysia, it is still early days to draw any meaningful conclusion.

He said after two weeks of selling, foreign investors bought local equities in the open market amounting to a net of RM175 million.

Zulkifli said the purchase was entirely attributable to trades last Friday, as foreign investors were net sellers, albeit marginally, from Monday through Thursday.

He said foreign trading was lacklustre during the first four days of the week, but came alive last Friday with RM282 million mopped up. 

That was the highest since June 10, 2014, he said.

Zulkifli said last week’s purchases reduced the cumulative net foreign outflow for 2015 to RM2.82 billion.

He said the cumulative foreign outflow for the entire 2014 was RM6.9 billion.

“Foreign participation rate (daily average gross purchase and sale) surged to RM1.24 billion, the highest this year.

“On [last] Friday, gross value traded hit RM2.15 billion, the highest since March 21, 2014,” he said. 

Zulkifli said local institutions sold marginally last week at RM86 million, as participation rate rebounded to RM2.2 billion.

He said local institutions had absorbed a net of RM3.18 billion so far this year, adding that in 2014, they bought RM8.2 billion net.

“Retailers were still slow off the mark after the break. Trading activity was listless at only RM799 million participation rate.

“Retailers sold RM88.6 million last week, the sixth straight week of selling,” he said.

On the region, Zulkifli said the performance of equity markets around the world turned uneven last week.

“We detect a divergence in the fortunes of markets.

“In the United States, focus shifted away from equities to bonds and treasuries after US Federal Reserve (Fed) chair Janet Yellen indicated that the Fed may not raise interest rate so soon. European markets rallied as Greece received a lifeline,” he said.

Zulkifli noted that global investors snapped up Asian shares after the Chinese New Year break.

He said there had been a tidal wave of global money into Taiwan in the new Lunar Year. South Korea also recorded its highest net inflow of foreign funds into its equity market this year.

He also said Thailand appeared to be struggling to retain its foreign portfolio capital, while Indonesia remained the most favoured equity market in Southeast Asia

“On Bursa, there was no Lunar Year rally in February.

“However, the FBM KLCI and FBM70 indices overcame challenging market conditions to register a gain of 2.2% and 1.8% respectively for the month. It was the best February performance for the FBM70 in eight years,” he said.

This article first appeared in The Edge Financial Daily, on March 3, 2015.