Foreign funds turn net buyers
PETALING JAYA: The local stock market saw a small foreign tide-in of RM29.6 million after the outflow of RM193.1 million the week earlier, according to MIDF Research.
Worth noting is that this is the first time in the year, both local and foreign funds are net buyers in a week, as both categories of investors bought RM114.4 million and RM29.6 million respectively.
However, the research house said foreigners were net buyers ahead of Bank Negara’s meeting to decide on the overnight policy rate (OPR).
“On Monday they bought RM21 million and on Tuesday they increased their purchase to RM174.4 million.
“On Wednesday, they took profit after the central bank announced to leave the OPR unchanged at 3%, selling RM9.7 million. They returned as net buyers on Thursday, purchasing RM20.3 million but sold RM176.4 million on Friday,” it noted.
MIDF Research explained the heavy selling by foreign funds on Friday was partly due to the tighter-than-expected monetary policy by the European Central Bank and heightened prospects of a US rate hike towards end of the week.
“They also locked in part of their profits ahead of the long weekend as Bursa Malaysia was closed on Monday to celebrate Hari Raya Haji,” it added.
As of last Friday, the year-to-date cumulative net foreign inflow into shares listed on Bursa Malaysia increased to RM2.38 billion from RM2.35 billion a week ago.
In retrospect, foreigners had offloaded RM19.5 billion in 2015 and RM6.9 billion in 2014.
Foreigners’ participation rate decreased to RM620.96 million from RM1.09 billion a week earlier.
MIDF Research said local institutions continued buying for the second week although at a lower pace of RM114.4 million from RM177.8 million in the preceding week.
“Before that, they had been selling every week since July 8. Meanwhile, local funds’ participation rate declined further to RM1.82 billion,” it noted.
On the other hand, retailers turned net sellers last week, offloading RM144 million after being net buyers for three successive weeks previously. The quantum of selling by retailers was the highest since March.