Bursa starts first week of 2017 with positive note
KUCHING: Bursa Malaysia ushered 2017 with positive vibes as foreign funds poured in a net amount of RM101.8 million into the local stock exchange for the first week ended January 6.
The net inflow of funds into Bursa last week was in contrast to a net outflow of RM31.2 million registered in the prior week ended December 30.
The research arm of MIDF Amanah Investment Bank Bhd ( MIDF Research) yesterday said in the first week of 2017, the net amount transacted by foreign investors on Bursa was at RM101.8 million, compared with an outflow of RM31.2 million in the prior week.
The return of foreign funds into Bursa could be attributed to the general inflows into Asia last week, supported by Malaysia’s encouraging trade numbers which saw a rebound of 7.8 per cent year- on-year (y- o-y) in exports last November.
“On net daily basis, foreign investors were seen buying on ( last) Tuesday and Friday, with the bulk on the latter day of RM136.4 million,” it said in a note yesterday.
“Attritions on Wednesday and Thursday were identical at RM28.2 million.”
Meanwhile, MIDF Research observed that the gross participation rate of retail investors continued to expand for the second week ended January 6 in a row to RM596.1 million from RM429.6 million recorded in the prior week ended December 30.
The higher participation rate was due to buying on dips conviction which has turned negative for the second week to a contraction of RM123.3 million compared to the prior week of RM68.8 million.
Additionally, the gross partici-
On net daily basis, foreign investors were seen buying on (last) Tuesday and Friday, with the bulk on the latter day of RM136.4 million.
pation rate of local institutional investors improved for the second week ended January 6 in a row to RM2.06 billion from RM1.92 billion recorded in the prior week ended December 30.
On a larger scale, MIDF Research observed that all the market indices it tracked ended the initial week of 2017 in positive zone.
“The Philippines PCOMP, which has been oversold last year, registered the highest weekly gain of 5.96 per cent. It seems that investors are returning and are “bargain hunting” for undervalued stocks.
“The Malaysia (FTSE Bursa Malaysia) KLCI was up by 2.06 per cent on-week to 1,675.49 points while the ringgit was stronger by 0.31 per cent at RM4.4725 against US$ 1.
“Positive global economic data over the past week may have helped to provide further assurance and confidence to investors which were translated into a positive aggregate net fund flow of US$ 755.45 million among the markets that we track,” the research firm said.
Most financial markets showed a positive inflow last week, it said, while two particular markets – Indonesia and India – started the year with negative weekly outflows. South Korea has the highest positive inflow of capital at US$ 595.42 million as investors were positive about the political reform that is currently happening in the country.
It observed the expectation was that the reform would change the economic structure that has been affected by “chaebols” corporate governance.
Likewise, the research firm opined that the India’s stock market still suffered a strong selling pressure from a stronger US dollar pursuant to Federal Reserve rate hike and a demonetisation drive which is happening within the country. India’s net foreign fund outflow last week was at US$ 238.69 million.
MIDF Research