Highlight Outflow of foreign funds continues for fifth week on Bursa

by **Cals** Mon 11 Nov 2013, 17:10

Highlight Outflow of foreign funds continues for fifth week on Bursa

Business & Markets 2013

Written by Surindran Murugiah of theedgemalaysia.com

Monday, 11 November 2013 16:23

KUALA LUMPUR (Nov 11): The outflow of foreign capital from Bursa Malaysia continued for the fifth week running last week, but at a stable momentum, according to MIDF Research.

In its Foreign Fund Flow report today, MIDF Research head Zulkifli Hamzah said foreign funds sold in the open market (i.e excluding off-market deals) some RM503.9 million of Malaysian equity, compared to RM480.1 million offloaded the week before.

Zulkfili said that in the last five weeks, a total of RM1.6 billion had left Malaysian equity.

“Foreign funds continued to exit Bursa Malaysia at a moderate, gradual and manageable rate.

“This is positive for the local bourse. The stability of the ringgit indicates that there has been no mass exodus of foreign capital. Purchases by local funds have helped mitigate the downside in prices,” he said.

Zulkfili said also said foreign funds were net sellers every single day last week, adding that they had been net sellers in 21 out of the last 23 trading days on Bursa.

“Foreign participation picked up again last week, indicating more aggressive selling. However, the participation rate remained below the RM1 billion mark for the seventh consecutive week. Participation rate (average daily gross purchase and sale) was RM857 million, compared with RM835 million the week before. It was the highest in six weeks.

“Local institutions remained net buyers for the fifth consecutive weeks, absorbing RM504.9 million. Participation rate actually fell to RM1.73 billion from RM1.87 billion the week before, indicating cautious intervention. Selling by retailers abated to only RM1 million last week, while participation rate surged to RM1.1 billion, manifested in a more active second and third liner stocks,” he said.

On the Asian region, he said that after nine weeks of buying, global funds halted their purchase of Asia stocks.

He said that based on aggregate data from seven proxy Asian markets (Korea, Taiwan, Thailand, Malaysia, Indonesia, Philippines and India), foreign funds sold on a net basis, US$1 billion of stocks in the aforementioned markets.

Zulkifli said East Asian Emerging markets felt the brunt of foreign selling last week.

“A total of US$203 billion left the Thai market, the highest since the third week of September.

“Residual foreign selling continued in Indonesia for the seventh consecutive week. Foreign funds exited Manila for the third week in a row, and may gain pace this week in the aftermath of the natural disaster,” he said.