Foreign investors turn net sellers again

by **Cals** Tue 11 Mar 2014, 08:09

[size=33]Foreign investors turn net sellers again[/size]

Posted on 11 March 2014 - 05:40am

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[size=14]PETALING JAYA: Despite bullish sentiments in most emerging markets, foreign funds offloaded RM218.9 million worth of local stocks from Bursa Malaysia last week, compared with a net purchase of RM296.2 million in the week before, said MIDF Research.

"Foreign investors resumed their sell down of Malaysian stocks after making a surprise purchase the week before. However, the amount of outflow was relatively insignificant and was well absorbed by local liquidity," head of research Zulkifli Hamzah said yesterday.

As far as the emerging markets are concerned, the mood is upbeat, as foreign investors bought stocks in Thailand, Philippines and Indonesia. Meanwhile, the steady money inflow to more developed markets, such as Korea and Taiwan, also reflects bullish intent.

According to Zulkifli, foreign investors remained aggregate net buyers of equity in the seven Asian markets, namely Korea, Taiwan, Thailand, Malaysia, Indonesia, the Philippines and India. The total amount of foreign capital inflow however fell to US$1.19 billion, down from US$1.73 billion in the week before.

Closer to home, foreigners sold local stocks from Monday through to Thursday at an average of RM55.1 million per day.

Zulkifli said this was relatively low compared with the average sale of RM166.3 million between Jan 3 to Feb 26 this year, when foreign investors sold every day during the 35-day trading period, except on Feb 19.

On participation rate, Zulkifli said foreign involvement remained moderate at below the RM1 billion mark. Average daily foreign participation rate fell to RM933 million, down from RM986 million in the week before, showing that the intensity of foreign trade is still absent.

Retail investors turned cautious last week, he said, making a marginal net sale of RM7.5 million after two weeks of buying. Daily participation rate dropped sharply to below the RM1 billion mark for the first time in three weeks at only RM881 million.

Local institutional funds supported the market last week, mopping up RM226.4 million net. Zulkifli however opined that local funds were not aggressive in buying.

"Although the local institutional's participation rate remained elevated at RM2.41 billion, their rate had already exceeded the RM2 billion mark in the last nine weeks," he said.

On another note, Zulkifli said last week was a positive start for the local equity market in the month of March.

"Although the FBM KLCI's 30 component stocks consolidated, the rest of the universe had a buoyant opening week of the month," he said.

The "retail" stocks has also made a strong comeback last week, he added.

After five weeks in the green zone, the KLCI slid marginally by 0.2% last week. For the year-to-date, the benchmark index is down 1.9%.

Commenting on the local stock market outlook, Zulkifli said MIDF would "stick to trading".

He said Malaysia's exports grew at double digit for the second consecutive month in January, while Bank Negara Malaysia's decision to maintain the overnight policy rate is market positive. In addition, rally in commodity prices is also benefiting Malaysia.

However, the MH370 episode may dampen sentiment, given the uncertainty surrounding the tragedy Zulkifli cautioned, as how the authorities respond to the case over the next few months may have an impact on the market.
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