Foreign buying picks up on Bursa after 13 weeks

KUCHING: Global investors finally made their way to Malaysian shores after 13 uninterrupted weeks of foreign net selling of stocks listed on Bursa Malaysia.

Based on preliminary data from Bursa which excluded off market deals, MIDF Amanah Investment Bank Bhd ( MIDF Research) saw that global funds accumulated RM348.9 million net of local stocks.

So far in 2018, global funds have been net buyers of Malaysian stocks for 15 out of 31 weeks, it said.

“Offshore funds started week with a marginal level of attrition of only RM39.2 million net.

“Meanwhile, on Tuesday – which was the last trading day of July – foreign investors mopped up RM343.5 million – the largest inflow in a day since April 19, 2018 as the visit of China’s foreign minister, Wang Yi to Malaysia increased prospects of better bilateral ties between the two nations.

“Foreign net buying resumed on Wednesday but at a slower pace of RM151.3 million following news that the US and China may revive trade negotiations to diffuse tensions. The FBM KLCI took cue of the news to jump 0.23 per cent to the highest close in 48 trading days at 1,788 points.

“Overseas investors returned to selling mode on Thursday to a tune of RM123.7 million as the US proposed a higher tariff of 25 per cent on US$200 billion worth of Chinese imports.”

Nonetheless, MIDF Research saw that global funds chipped in RM17 million worth of local stocks on Friday, tracking gains from the technology rally on Wall Street overnight. Pengurusan Air Selangor also announced a proposed takeover of water firm, SPLASH for RM2.6 billion on the same day.

“For the past three months, foreign net outflows have been gradually receding,” it added.

“May saw global funds taking out RM5.6 billion followed by RM4.9 billion in June while July only saw foreign net selling worth RM1.7 billion.

“Amongst the four Asean markets we track, Malaysia has the second lowest outflow worth US$ 2.11 billion or RM8.45 billion after the Philippines as of last Friday on a year- to- date basis.

“The average daily traded value (ADTV) in the retail market dipped below the RM1 billion mark last week. Nonetheless, the ADTV of foreign investors remain solid above RM1 billion at RM1.16 billion.”

Looking at money outflows, IOI Corporation Bhd topped the list last week at RM7.68 million as its share price underperformed with a 0.44 per cent increase against the FBM KLCI, which advanced by 0.62 per cent during the week under review.