Fund Flow Intensity of foreign selling in Malaysia eased last week

by **Cals** Mon 17 Feb 2014, 18:43

Fund Flow Intensity of foreign selling in Malaysia eased last week

Business & Markets 2014

Written by Surin Murugiah of theedgemalaysia.com

Monday, 17 February 2014 10:06

KUALA LUMPUR (Feb 17): The intensity of foreign selling in Malaysia eased last week, but the size of the outflow was still significant, according to MIDF Research head Zulkifli Hamzah.

In his fund flow report Monday, Zulkifli said foreign funds offloaded RM760.2 million net of Malaysian stocks in the open market (i.e excluding off-market transactions), compared with RM1.1 billion the week before.
He said it was also the 18th week out of the last 19 that foreign investors had been net sellers.
Zulkifli said daily outflow was capped at below RM250 million for the first time since the first week of trading this year.

He said that so far in 2014, daily net sale exceeded the RM500 million level only once compared with 6 times in 2013.

It was in the RM300 million-RM500 million bracket only 3 times, compared with 11 times in 2013, he added.

Zulkifli said that year-to-date, a total of RM5.54 billion of foreign money had exited Malaysian equity.

He said in the last 19 weeks (i.e during the current phase of foreign selldown), a total of RM11.21 billion of foreign money had exited Malaysian equity.

That translated into an average of RM590 million a week, an increase from RM580 million the week before, he said.

Zulkifi said average daily foreign participation rate dropped abruptly to only RM790 milion, after surpassing the RM1 billion level for four consecutive weeks.

He said foreign participation rate (average daily gross purchase and sale) was the lowest in six weeks, adding that this was another indication that the intensity of foreign selling was tapering.

“Retail investors’ daily participation rate surged last week to RM979 million, the highest since November 2013.

“However, we believe the early birds are already taking profit, as overall, retailers were net sellers, albeit marginal at only RM40 million,” he said.

Zulkifli said he believed the market had overcome the difficult hurdles this year and better days ahead beckon.

He said that for Malaysia, the latest numbers on the current account and the government’s fiscal position showed good improvement and are reasons for investors to cheer.

“Small and mid-cap stocks had a good week and we expect the momentum to continue as three conditions make it conducive for a continued uptrend.

“These are (i) healthy and rising retail participation; (ii) technically bullish indicators; and (iii) improving broader sentiment towards equity,” he said.