MIDF RESEARCH SEES FOREIGNERS RETURNING TO STOCK MARKET

Global funds sold RM247.1m on Bursa last week compared with RM531.8m previously

FOREIGN investors have been disposing of local stocks at a slower pace in the past four weeks, suggesting that they will soon buy more than sell.

MIDF Research said based on preliminary data from Bursa Malaysia, the amount sold by global funds last week had been reduced by more than half to RM247.1 million net from RM531.8 million in the preceding week. This was the smallest weekly attrition so far this year.

“Global investors were net sellers every day except Wednesday, which saw a foreign inflow worth RM71.7 million net, the first since June 29,” it said in a fund flow report yesterday.

MIDF Research said Bursa Malaysia’s key index followed suit to end 0.91 per cent higher at 1,753 points last week amid United States Federal Reserve chairman Jerome Powell’s upbeat assessment of the US economy.

“Other Asian peers, namely South Korea, Taiwan and the Philippines, also experienced a surge of inflows on the same day.”

MIDF Research said foreign net selling that occurred on other days remained well below RM100 million, a level deemed moderate, while Thursday recorded the highest foreign net selling during the week at US$95.6 million (RM388.4 million) net.

“The FTSE Bursa Malaysia KLCI (FBM KLCI) marked its nine-day winning streak on the same day, supported by the rise in construction stocks, following the announcement that the Kuala Lumpur-Singapore high-speed rail project will be deferred instead of being cancelled.

“However, the reduction of outflows to RM64.6 million net on Friday coincided with the 0.26 per cent decline in FBM KLCI amid profit-taking activity in telecommunication stocks as they led decliners,” it said.

MIDF Research said Malaysia’s year-to-date foreign net outflow had reached RM8.31 billion, offsetting about 80 per cent of last year’s RM10.33 billion inflow.

“This is still the second lowest outflow among the four Asean markets we track, standing below the Philippines which has a yearto-date outflow of US$1.31 billion net.”

Participation among foreign investors, retailers and local institutional funds remained positive as their average daily value traded stood above RM1 billion, RM800 million and RM2 billion, respectively.

Stocks among the top 10 inflow list included Genting Bhd, YTL Power International Bhd and CIMB Group Holdings Bhd, which registered net inflow of RM8.98 million, RM6.80 million and RM6.72 million, respectively.

Stocks in the top 10 outflow list included Malaysia Airports Holdings Bhd, Public Bank and Tenaga Nasional Bhd, which recorded net outflow of RM26.27 million, RM8 million and RM7.53 million, respectively.