Foreign funds flowing back into Malaysian equities Monday, 3 November 2014

by **Cals** Mon 03 Nov 2014, 10:07

Foreign funds flowing back into Malaysian equities

Monday, 3 November 2014

KUALA LUMPUR: Foreign funds started flowing back into the Malaysian stock market in the week ended Oct 31, in line with the key Asian markets, according to MIDF Equities Research.

It said on Monday foreign investors bought net RM460mil of Malaysian equities in the week ended Oct 31, the fifth highest in a week this year. This was a turnaround from the net selling of RM351mil the week ended Oct 24.

“For Malaysia, foreign money flow has been erratic this year. The frequency of the cycles has been higher than many of its Asian counterparts. There had been a pronounced downcycle, or money outflow, in September and in the fi rst three weeks of October. However, the tide appears to be reversing, based on the numbers last week,” it said.

MIDF Research said foreign investors were net sellers on Monday, but turned strong buyers for the rest of the week. Buying peaked on Wednesday when foreign funds bought +RM202.3m, only the 15th day this year that net purchase had exceeded RM200mil.

“As for October, foreign funds sold -RM493.3mil, significantly lower than the -RM1.493bil in September. For the year until October, the outfl ow of foreign funds had amounted -RM3.69bil, reversing the +RM3.03bilinflow last year,” it said.

The research house said foreign participation eased slightly after three weeks of “elevated” (more than RM1bil) volume. Daily average gross purchase and sale fell below RM1bil to RM967mil.

“Local investors cleared positions, taking advantage of foreign entry. Retail investors sold -RM107.9mil while local institutions offloaded -RM352.1mil respectively. Institutional participation rate bounced back to above RM2bil at RM2.3bil, while retail participation climbed slightly to RM867mil. However, we note that retail participation surged to RM1.2bil on Friday, the highest since Aug 21,” it said.