Foreign tide returns to stocks on Bursa

KUALA LUMPUR: Foreign tide returned to stocks listed on Bursa Malaysia last week despite the holiday-shortened week, 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, international funds bought RM 46.5 million net of local equities, last week.

“This is the third lowest weekly foreign net inflow recorded so far in 2018,” MIDF Research said.

“International funds were net sellers on Monday to a tune of RM55 million net, extending the foreign selling spree to seven days.

“Nonetheless, the seven-day selling streak was snapped on Tuesday as foreign investors snapped up RM48.2 million net of local equities ahead of the Eidul Adha break and the trade negotiations between Beijing and Washington which stoked risk-on mood.”

MIDF Research highlighted that as the local bourse reopened on Thursday, offshore investors accumulated RM77.9 million net which lifted the FBM KLCI by 0.71 per cent to 1,810.87 points, the highest close since late May this year.

The foreign net inflow into Bursa on Thursday was in conformity with the other regional peers the research arm monitored namely South Korea, Taiwan, Thailand, Indonesia and the Philippines.

“However, foreign investors were back in selling mode on Friday, disposing RM24.6 million net of local equities as Chinese and US officials ended the two days of talks with no major breakthrough, renewing concerns that trade woes may escalate further into the future.”

MIDF Research noted that with four trading days left before August ends, the month has so far seen a marginal level of outflow worth RM82.1 million net.

The year-to-date outflow from Malaysia still stood at RM8.6 billion as of last Friday, the second lowest outflow amongst the four Asean markets the research arm monitored.

“Foreign investors have also been net buyers in 17 out 34 weeks so far in 2018.”

Meanwhile, the research arm noted that participation amongst foreign investors remained strong as their weekly average daily traded value (ADTV) stood above RM1 billion for the seventh week running.

It also noted that the scene in the retail market and local institutional funds was equally healthy as their ADTVs rose more than four per cent for the week.