Foreign selling on Bursa ‘lowest in seven weeks’

by **Cals** Wed 15 Jun 2016, 01:17

Foreign selling on Bursa ‘lowest in seven weeks’

By Surin Murugiah / The Edge Financial Daily | June 14, 2016 : 12:18 PM MYT

[You must be registered and logged in to see this image.]
[You must be registered and logged in to see this image.]
[You must be registered and logged in to see this image.]

Previous
Next

[size]

This article first appeared in The Edge Financial Daily, on June 14, 2016.

KUALA LUMPUR: Foreign selling on Bursa Malaysia continued for the seventh consecutive week, but the pace of the selldown decelerated significantly last week, according to MIDF Research.
In his weekly fund flow report yesterday, MIDF Research head Zulkifli Hamzah said the net amount offloaded by foreign investors narrowed to only RM169.9 million last week, from RM1.19 billion the week prior, based on transactions in the open market, which excluded off-market deals.
Zulkifli said foreigners were net sellers on three out of five trading days last week.
“Selling momentum from the week before spilled over when trading commenced on Monday, with foreigners offloading RM28.5 million. The selling ended on Tuesday, with a buying of RM93.8 million. It was the highest daily buying since April 21. Foreign purchase was extended into Wednesday at RM31 million,” he said.
Last Thursday, the buying momentum halted, said Zulkifli, with a relatively heavy attrition of RM163.6 million. But last Friday, they were back in selling mode, with as much as RM102.6 million sold.
Last week’s foreign withdrawal further reduced the cumulative net foreign inflow thus far this year into shares on Bursa to an estimated RM1.11 billion, from the prior week’s RM1.22 billion, showing a declining trend for the seventh week.
In comparison, foreigners offloaded RM19.5 billion and RM6.9 billion in 2015 and 2014 respectively.
The foreign participation rate, in terms of volume, plummeted to RM809.9 million last week, the lowest figure thus far this year, said Zulkifli.
“Trading activity returned to its normal track after investors’ prior-week portfolio rebalancing. Taking out [the] prior week’s outlier data point, [the] foreign participation rate has in fact been declining for three straight weeks.”
Meanwhile, local institutions loaded up RM220 million on Bursa last week, though its participation rate edged down to RM1.93 billion from the prior week’s RM2.2 billion.
Retail buyers offloaded RM50.1 million of equities, their biggest selling since April 8, while the participation rate rose to RM568.4 million.
Regionally, Zulkifli said global liquidity flows into Asia remained strong for the second week running, and that based on provisional data from the respective exchanges in the seven Asian markets that MIDF Research tracks, investors classified as “foreign” bought equities amounted to US$2.42 billion (RM9.87 billion).
“All the markets we track have been beneficiaries of foreign buying for three straight weeks, with the exception of Malaysia,” he added, saying global investors’ interest in emerging markets was reignited on the diminished possibility of a US Federal Reserve rate hike in June.
Globally, there was little excitement as equity prices remained generally rangebound for the second consecutive week.
“Investors’ risk appetite was boosted early in the week. However, sentiment was weighed down by concerns about [the] world’s economic health as the World Bank cut its 2016 global growth forecast to 2.4% from 2.9%,” said Zulkifli.
[/size]