Fund Flow Foreign investors resume selldown of Malaysian stocks, minor dent

by **Cals** Mon 10 Mar 2014, 11:16

Fund Flow Foreign investors resume selldown of Malaysian stocks, minor dent

Business & Markets 2014

Written by Surin Murugiah of theedgemalaysia.com

Monday, 10 March 2014 10:40

KUALA LUMPUR (March 10): Foreign investors resumed their selldown of Malaysian stocks after making a surprise purchase the week before, according to MIDF Research head Zulkifli Hamzah.

In his Fund Flow report Monday, Zulkifli however said the amount of outflow was relatively insignificant and was well absorbed by local liquidity.

He said foreign portfolio investors sold Malaysian shares in the open market (i.e excluding off-market transactions) amounting to RM218.9 million net last week, compared with a net purchase of RM296.2 million in the preceding week.

“Foreigners sold on Monday through to Thursday at an average of RM55.1 million per day.

“This was relatively low compared with the average sale of RM166.3 million between 3 Jan to 26 February this year, when foreign investors sold every day during the 35-day trading period, except on 19 February. We note that selling stopped abruptly on Friday, as foreign investors almost squared their position for the day, adding a marginal RM1.4 million,” he said.

Zulkifli said that in terms of participation rate, foreign involvement remained moderate at below the RM1 billion mark.

He said average daily foreign participation rate (average daily gross purchase and sale) fell to RM933 million from RM986 million the week before, adding that the intensity of foreign trade was therefore still absent.

Zulkifli said retail investors turned cautious last week, making a marginal net sale of RM7.5 million after two weeks of buying.

He said the daily participation rate dropped sharply to below the RM1 billion mark for the first time in three weeks at only RM881 million.

“However, we note that “retail” stocks made a strong comeback last week.

“Local institutional funds supported the market last week, mopping up RM226.4 million net. It was not aggressive, although participation rate remained elevated at RM2.41 billion. Local institutional participation had exceeded the RM2b mark in the last nine weeks,” he said.

Elsewhere, foreign investors remained aggregate net buyers of equity in the seven Asian markets that MIDF Research tracks (Korea, Taiwan, Thailand, Malaysia, Indonesia, Philippines and India), said Zulkifli.

He said the amount mopped up fell to US$1.19 billion from US$1.73 billion the week before.

“We note that the mood is upbeat as far as Emerging markets are concerned. Foreign investors bought back Thai stocks after seven straight weeks of selling.

“Purchase of Indonesian stocks continued for the fifth consecutive week, while the inflow to Philippines picked up pace last week.

“In India, global funds appear to be positioning for the election, the dates beginning in April were announced last week,” he said.