Thursday 28 Mar 2024
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KUALA LUMPUR (Feb 9): After selling Malaysian stocks unrelentingly since the start of the year, foreign investors appear to have made a reversal last week, according to  MIDF Research.

In his weekly fund flow report Monday, MIDF Research head Zulkifli Hamzah said that foreign selling peaked in the third week of January and had abated significantly thereafter.

“Still, it is early days and any firm conclusions would be premature. It is a welcomed respite, nevertheless,” he said.

Zulkifli said that last week, investors classified as “foreign” bought, on a net basis, a total of RM268.6 million of Malaysian equity.

He said there was a buying frenzy on Wednesday, when the market reopened after the long break.

“The FBM KLCI rose by as much as 50.15 points within minutes of the opening bell.

“On the day alone, foreign investors mopped up RM333.3 million net, the highest in a single day since 30 May 2014,” he said.

Zulkifli said the gross value traded on the day exceeded RM2 billion for the first time since 21 March last year.

He said that on a cautious note, foreign investors were net sellers on Thursday and Friday, albeit marginally on both days.

He said that as money flow tended to be intermittent and lumpy in the early stages of a trend reversal, Wednesday could either be the first of multiple waves, or it could fizzle out disappointingly.

“The days ahead will testify to this.

“Last week purchases reduced the cumulative net foreign outflow for 2015 to RM2.1 billion. The cumulative foreign outflow for the entire 2014 was RM6.9 billion,” he said.

Zulkifli said foreign volume was very strong indeed, explaining that foreign participation rate (daily average gross purchase and sale) surged to RM1.55 billion, the highest since May 2014.

He said foreign participation had exceeded RM1 billion, five weeks in a row now.

“Both local institutions and retailers were net sellers, offloading RM162.8 million and RM105.8 million respectively.

“Participation rate for the institutions was elevated at RM2.3 billion but retailers remained on the sideline, although the participation rate crept up to RM814 million,” he said.

Commenting on the regional markets, Zulkifli said after the inertia in January, Wall Street came alive last week.

He said the Dow Jones rose 3.8%, the highest gain since January 2013.

Zulkifli said the main driver for the bellweather equity market last week was unmistakably the recovery in crude oil price.

He said the price of Brent crude rose by 20%, the biggest two-week margin since March 1998.

He said that for the third week running, global investors were strong net buyers of Asian equity.

Zulkifli said the momentum continued to favour Emerging Asia.

He said global funds had been simultaneous net buyers in Thailand, Indonesia and the Philippines for three weeks in a row.

“But more importantly, the buying also extended to Malaysia last week, making it the first time since August 2014 that foreign investors were net buyers in all four South East Asian Emerging Markets at once.

He said the FBM KLCI gained ground last week and had now lost only 1.0% in the year-to-date score.

 

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