Foreign tide into stocks listed on Bursa accelerates

KOTA KINABALU: Foreign tide into stocks listed on Bursa Malaysia accelerated last week, marking the second consecutive week of inflows, analysts observed in the latest fund flow report.

According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), based on preliminary data from Bursa which excluded off market deals, overseas funds mopped up RM458.2 million net of local equities,higher than the RM348.9 million bought in the week before.

“The week started off slow as foreign investors chipped in RM3.9 million net on Monday, the lowest daily inflow so far in 2018,” MIDF Research said.

“Nonetheless on Tuesday and Wednesday, foreign net buying surged to RM233.4 million and RM229.6 million, respectively as the FBM KLCI posted gains above 0.5 per cent on both days. Wednesday itself was rather a remarkable day as it was the first time that the local bourse closed above 1,800 points since late of May this year.”

The research arm added that the upbeat mood on these two days were driven by the strong corporate earnings in the US especially within the financial sectors which lifted the S&P500 to the highest close since late January this year on Tuesday.

On foreign net buying on Thursday, MIDF Research noted that it declined to just only RM18.2 million net as investors were more cautious following China’s move to slap 25 per cent duties on an additional US$16 billion of US goods effective August 23, 2018, which mirrored levies by the US.

“The Turkish Lira’s plunge to an all-time low on Friday amidst possibilities of Turkey’s economic crisis spreading to other regional markets led to a foreign net attrition on Bursa worth RM26.9 million net, snapping its five-day buying streak.”

MIDF Research further noted that as global investors made a comeback, the year-to-date outflow from Malaysia has been reduced from RM8.45 billion to RM8 billion as of last Friday.

Malaysia is still the nation with the lowest second outflow amongst the four Asean markets the research arm monitors.