Subdued foreign buying on Bursa last week

PETALING JAYA: Foreign investor activity on Bursa Malaysia remained suppressed last week as foreigners bought a small amount of stocks valued at RM118.8 million after offloading RM240.8 million the week before.

MIDF Research said the trend was consistent elsewhere in the region and in East Asia. The figures are based on transactions in the open market, and exclude off-market deals.

It said Bursa was closed on Monday for a public holiday. There was healthy buying activity on Tuesday when the market reopened, as foreigners bought RM143 million.

“However, the momentum was not sustained and the buying tapered off on Wednesday and Thursday. By Friday, foreigners turned net sellers, but the amount was low,” MIDF Research said in its fund flow report yesterday.

It said last week’s small foreign buying raised the cumulative net foreign inflow into shares listed on Bursa to an estimated RM2.42 billion, down from a peak of RM6.47 billion in April. This means that since April, foreign investors have redeemed about RM4 billion. The amount is still modest relative to the RM19.5 billion and RM6.9 billion net outflows in 2015 and 2014 respectively.

Interestingly, foreign participation was rather active last week, as the average daily value of shares traded broke the RM1 billion mark to hit RM1.04 billion.

Trading was heavy mainly on Tuesday and Wednesday at more than RM1.2 billion each day. Nevertheless, foreign investors were quiet on the last two days of the week.

Local institutional investors dominated market participation and the average daily value of shares traded stayed above RM2 billion for the fourth consecutive week at RM2.2 billion.

Retail buyers retreated from the market, offloading RM87.9 million. The retail average daily value of shares traded plummeted 21% to only RM466 million, among the lowest this year.