Funds Flow Foreign funds net buyers last week, bought RM414m Malaysian stocks, says MIDF

by **Cals** Mon 14 Apr 2014, 17:39

Funds Flow Foreign funds net buyers last week, bought RM414m Malaysian stocks, says MIDF

Business & Markets 2014

Written by Chong Jin Hun of theedgemalaysia.com

Monday, 14 April 2014 10:29

KUALA LUMPUR (Apr 14): Foreign funds were net buyers of Malaysian shares last week as the US corporate earnings reporting season prompted anticipation of volatility in share markets there, according to data compiled by MIDF Amanah Investment Bank Bhd.

In Malaysia, MIDF research head Zulkifli Hamzah wrote in a note today that foreign funds bought RM414.4 milion worth of stocks in the week ended last Friday (April 11), the third consecutive week of net purchases. The figure was higher than the than the RM107.7 million worth of net purchases in the preceding week.

"Foreign investors’ optimism is reflected by the fact that they were net buyers every single trading day last week. The amount bought hit RM195.5m on Monday, the third highest in a day this year.

"It tapered on Tuesday but buying remained steady throughout Wednesday to Friday, despite the upheavals on Wall Street and Europe with respect to the tech selloff, and the election outcome in Indonesia," Zulkilfli said.

Among Malaysian investors, he said retail investors were net buyers of local shares last week at RM20.2 million.

Institutional investors were however net sellers after they disposed of RM434.6 million worth of shares.

"Despite the reported surplus in the flow of fund in the last three weeks, Malaysia remained in the red for 2014. The year’s cumulative net withdrawal from Malaysian equity amounted to RM5.55b as of last week. However, this was a 20% reduction from the cumulative peak of RM6.90b," Zulkifli said.

Looking ahead, US stock markets will be closely watched as investors digest first corporate earnings there.

Zulkifli said the decline in technology stocks last week amid earnings concerns could be an indication of things to come.

"The market is heading into May, which is historically not a good month for Wall Street (recall the adage “Sell in May and go away”?).

"Uncertainty on Wall Street may be the catalyst for funds to hunt for value elsewhere. Asia appears to be a prime target as seen by the flow of fund data in the past few weeks. However, the risk of a reversal also heightens," he said.