Fund Flow Foreign funds bought RM656.8 million last week, says MIDF Research

by **Cals** Tue 20 May 2014, 00:03

Fund Flow Foreign funds bought RM656.8 million last week, says MIDF Research

Business & Markets 2014

Written by Surin Murugiah of theedgemalaysia.com

Monday, 19 May 2014 09:39

KUALA LUMPUR (May 19): Foreign buying of stocks listed on Bursa Malaysia surged last week, and for the fourth consecutive week, foreign investors were net buyers on the Malaysian bourse, mopping up RM656.8m in the open market (i.e excluding off-market deals), according to MIDF Research.

In his weekly Fund Flow report, MIDF Research head Zulkifli Hamzah said despite a holiday-shortened 4-day trading week, the amount was the third highest in a week this year.

He said the buying picked up suddenly on Wednesday, after the holiday, and the intensity remained for the rest of the week.

He said the mop-up rate rose significantly, averaging RM164.2 million per day, compared with RM53.2 million in the preceding week.

“Indeed, the mop-up rate was the second highest this year, after the RM166.5 million recorded in the last week of March.

“Overall foreign participation also surged. Average daily foreign participation rate (average daily gross purchase and sale) increased significantly to RM1.25 billion, almost double the RM672 million recorded the week before. Indeed, it was the second highest in a week this year,” he said.

Zulkfili said the strong foreign purchase last week had reduced the cumulative net outflow from Malaysia in 2014 to negative RM4.05 billion in the year-to-date, adding that in 2013, Malaysia reported a net inflow of RM3.0 billion.

“Meanwhile, retail investors remained cautious, selling RM52.3 million, an increase from RM31.9 million sold the week before. Participation rate recovered slightly to RM750 million, which is still considered low,” he said.

Zulkfili said local funds appeared to be on aggressive selling mode, after offloading RM604.5 million last week, adding that it was the second highest amount sold in a week this year.

He said that as of last Friday local institutional funds had mopped up RM3.85b worth of Malaysian equity in the open market this year.

“They will be looking to clear some position to realise some gains to meet their dividend targets for 2014.

“Participation rate of local institutions also rebounded significantly to RM2.32 billion last week, after falling to less than RM2.0 billion the week before,” he said.

Commenting on the region, Zulkfili said the tide rose suddenly last week, adding that money flow to Asia surged to its highest in six weeks, after anaemic numbers in the preceding fortnight.

“Last week, global funds were aggregate net buyers of stocks in the seven Asian equity markets that we track (Korea, Taiwan, Thailand, Malaysia, Indonesia, Philippines and India).

“The amount mopped up amounted to US$3.1 billion, a reversal from an outflow of US$470 million the week before,” he said.

Zulkfili said India unsurprisingly attracted a sizeable amount of foreign portfolio capital, clearly on buoyant sentiment after the election.

He said the Indian market pulled in US$1.0 billion, the highest in seven weeks, and that excluded the figures for Friday, which have yet to be updated.

He said another big gainer was Korea, which reported foreign buying amounted to USD1.24 billion, the second highest in a week this year.

There was strong buying of Korean technology stocks which had retraced significantly in recent weeks, he said.

“Other Emerging Asia, sans Thailand, also saw significant foreign buying. Foreign purchase of Indonesian stocks surged to US$330.2 million, the highest in six weeks. The Philippines also reported an increase in foreign accumulation. Foreign funds also sold Thai stocks for the second week running, but the amount was still moderate.

“Foreigners bought US$203.7 million of Malaysia stocks, the second highest this year,” he said.