Foreign funds make strong comeback to Bursa

PETALING JAYA: Foreign funds accumulated RM322.7 million net of local equities last week, offsetting the RM310.1 million net withdrawn in the preceding week.

“International funds staged a solid comeback to Bursa as they turned net buyers after four straight weeks of selling,” MIDF Research said in its fund flow report.

It said the first two days of the week recorded a total foreign outflow of RM124.3 million net with each day not exceeding RM100 million. Risk aversion was spurred by US President Donald Trump’s plan to impose more tariffs on China if the talks between Washington and Beijing do not result in any favourable deal.

Nevertheless, foreign investors mopped up RM268.7 million net on Wednesday, the largest inflow in a day since Sept 21, lifting the local bourse 1.4% higher to 1,709 points. The heavy inflows were in conformity with other Asian peers namely Taiwan and Indonesia as China’s securities regulator pledged to enhance market liquidity.

Foreign net buying then shrank to RM6.7 million on Thursday ahead of Malaysia’s Budget 2019 budget before surging to RM172.2 million on Friday. Aside from the budget optimism, investors on Friday were comforted by the news that Trump wants to reach a trade deal with China during the G20 summit this month.

The month of October 2018 recorded a total foreign net outflow of US$1.41 billion (RM5.9 billion), compared with the RM66.3 million inflow seen in September 2018. The year-to-date outflow now stands at RM9.77 billion, offsetting 95% of last year’s net inflow. Notwithstanding this, Malaysia still has the second lowest outflow amongst the four Asean markets monitored by MIDF.

Participation amongst foreign investors was robust as the weekly average daily traded value (ADTV) was 18.4% higher compared with the ADTV in the retail market which advanced by only 0.3% during the week.

Meanwhile, the weekly ADTV of local institutional funds continued to drop for the second week running, staying below RM2 billion.