Foreign investors remain vested in Bursa
KUCHING: Despite the quagmire in South Korea and some attrition from regional peers, foreign investors maintained their conviction in stocks listed on Bursa Malaysia last week.
According to statistics from MIDF Amanah Investment Bank Bhd (MIDF Research), net amount purchased by foreign investors rose to RM309.4 million net which was four times higher than that in the preceding week.
These estimates were based on transactions in the open market which excluded off market deals.
“Indeed, net foreign purchases were recorded every day throughout the week,” it said in an update yesterday.
“Quietly, foreign investors have been net buyers for six straight days, the longest streak since April 20 to May 16.
“We note that foreign buying peaked on Monday at RM125.3 million which saw the FBM KLCI closing above 1,760 points for the first time in two weeks.”
This was in spite of South Korea being the biggest casualty for the week as foreign investors went on a selling spree, dumping US$1.55 billion of local stocks – the largest weekly pullout since August 2016.
“The heavy sell off coincided with KOSPI Composite Index’s biggest weekly loss since June last year of minus two per cent,” MIDF Research added. “Foreign selling peaked on Friday as global funds sold US$ 581 million net -- the highest in a day in almost two years.
“Bulk of the sell off consisted of technology companies as investors took cue from the downbeat performance of US technology stocks on Thursday. Likewise, the Won was also in the redzone as it lost 0.34 per cent last week to settle at US dollar to won at 1,122.18 won.
“The won’s weakness could be partly attributable to Korea’s slowdown in economic growth which saw its gross domestic product (GDP) expanding only 0.6 per cent in its second quarter this year (2Q17) compared with 1.1 per cent in 1Q17 as investment construction and export volumes fell.”
With one more trading day left, the research house said July looked set to be the seventh consecutive month of foreign buying. As of July 28, cumulative foreign inflow had amounted to RM485.3 million net for the month, which was already higher than June’s figures.
“Foreign participation rate was fairly healthy. Foreign average daily trade value (ADTV) rose 11 per cent from RM739 million in the prior week to RM818 million, hovering under the RM1 billion level for the fourth week running.
“Retail participation was still tepid. Retail ADTV decreased by 17 per cent, retreating to a level below RM700 million at RM648.5 million.”
Looking at the top net money inflows, Petronas Gas Bhd was the beneficiary of the highest net money inflow at RM17.55 million. This was followed by Kuala Lumpur Kepong Bhd in second place with RM5.28 million and Malaysia Airport Holdings Bhd in third with RM4.70 million.
Banks dominated the top two net money outflow spots last week with CIMB Group Holdings Bhd being the largest at RM21.71 million, followed by Malayan Banking Bhd at RM15.87 million. Fraser and Neave Holdings Bhd meanwhile registered the third largest net money outflow at RM12.87 million.