Foreign investors purchase RM44 mln equities last week
The net amount bought by foreign investors on Bursa last week became postive to RM44 million, the highest level since October 21. MIDF Research
KUCHING: Foreign funds turned net buyers last week with a net purchase of RM44 million worth of shares on Bursa Malaysia.
The money inflow came after seven consecutive weeks of outflow amidst uncertainty over the US post the presidential election and the magnitude of the Federal Reserve’s interest rates hike for next year.
The research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) yesterday said the direction of foreign fund flow into Malaysian equity changed last week as foreign investors turned net buyers.
“The net amount bought by foreign investors on Bursa last week became postive to RM44 million, the highest level since October 21.
“As mentioned in the prior week, we believe this ( money inflow) could signal a recovering confidence from foreign investors towards Malaysian equity,” it said in its report yesterday.
“Pursuant to the prior week, foreign investors were net buyers on Tuesday with a build up of RM159.9 million, the highest since mid-October.
“Despite the attrition on the remaining days which accumulated to RM115.9 million, foreign investors became net buyers last week, the first in eight weeks.
“The lowest attrition was on ( last) Friday with an outflow RM1.0 million,” the research firm observed.
On a cumulative year to December 16 basis, MIDF Research observed that the amount of net selling from foreign funds was at RM2.5 billion.
However, compared to 2015, the outflow amount was still considered low as just RM8.5 billion has been redeemed since April.
The net outflow for the whole of last year was at RM19.5 billion.
On another note, MIDF Research said the gross participation rate of retail investors has continued to expand last week albeit at a higher rate at RM378.5 million.
However, the buying on dips conviction fell slightly to RM14.1 million as compared to the prior week of RM21.1 million.
On a wider perspective, MIDF Research added funds that were classified as “foreign” were net sellers in six out of the seven Asian equity exchanges that it tracked.
“Money has been flowing out of most Asian indexes last week as the Federal Reserve increase the US base interest rate by a quarter of a percentage point,” it said, adding that the net outflow in the Asian stock exchanges it tracked last week was US$97.32 million.
“Nonetheless, the net amount sold decreased last week to US$97.32 million last from US$ 1,025.10 million recoreded in the prior week.
“In spite of that, the Philippine stock exchange was the hardest hit following the announcement of an interest rate hike in the US.”
MIDF Research observed that a total of US$87.38 million was flowing out of the country’s stock market last week.