Foreign attrition slows to pre-US election levels
KUCHING: The pace of Malaysian equity foreign attrition has slowed down to pre-US election levels, observed analysts with MIDF Amanah Investment Bank Bhd ( MIDF Research), as net amount sold by foreigners on Bursa was only at minus RM392.4 million last week – its lowest level since October 28.
This could be signalling a recovering confidence from foreign investors towards Malaysian equity, it said.
It is also notable that the tide out was in fact reversed last week in most other Asian markets.
“Foreign investors turned net buyer later in the week as evident by the slight build up on Thursday and Friday of RM26.7 million and RM42.2 million respectively,” it detailled in a report.
“However, this is still not enough to offset the attrition on Monday which was rather heavy at minus RM220.1 million.
“The lowest attrition was on Wednesday of minus RM78 million.”
On a cumulative year-to-date, MIDF Research said the amount of net-selling from foreigners has further deepened to minus RM2.5 billion. However, compared to 2015, the outflow amount is still considered low as only RM8.6 billion has been redeemed since April.
It was minus RM19.5 billion net outflow in 2015.
“While retail investors gross participation rate continued to be positive at RM348.5 million, it
Foreign investors turned net buyer later in the week as evident by the slight build up on Thursday and Friday of RM26.7 million and RM42.2 million respectively. MIDF Research
was nonetheless at the lowest rate since mid-July,” it said.
“Despite the lower rate, the buying on dips conviction increased last week to RM21.1 million.”
Looking at Asian equities, MIDF Research saw that after six weeks of outflow, Asian equities were back in positive territory. With that being said, the rate of inflow for the week is still rather tepid at around US$868.5 million last week.
“All the markets that we tracked showed positive flows with the exception of Indonesia, Malaysia and Philippines. The net amount bought went up from minus US$ 440.9 million to US$ 868.5 million last week.
“Most foreign funds which entered Asian markets last week were spurred by rallies and sentiment in Europe and the United States pushing more capital to the Asian Region. The net foreign fund inflow into Taiwan, Korea, Thailand and India were US$710.2 million, US$305.8 million, US$83 million and US$ 41.7 million respectively.”