MIDF Research: Foreign investors bought RM355.8m last week

MIDF Research: Foreign investors bought RM355.8m last week
Business & Markets 2014
Written by Surin Murugiah of theedgemalaysia.com
Tuesday, 22 July 2014 09:26

KUALA LUMPUR: Foreign investors mopped up RM355.8 million net last week on Bursa Malaysia, the highest in seven weeks, despite trading days shortened by the holiday on Tuesday, said MIDF Research.

In its fund flow report yesterday, MIDF Research head Zulkifli Hamzah said in a reversal of position, foreign investors bought back Malaysian stocks last week, after selling for the first time in three months the week before.

However, there was a foreign selldown of Malaysian stocks on Friday following the MH17 incident, he said.

Zulkifli said the amount bought by foreigners could have been higher if not for the deficit on Friday.

He said foreigners sold RM144 million of Malaysian stocks on Friday as sentiment was adversely affected by the MH17 tragedy, explaining that before that foreign investors were net buyers for three consecutive days from Tuesday.

He said on a cumulative basis, foreign investors remained net sellers of Malaysian stocks in 2014, but the net outflow as of last Friday had declined to RM1.46 billion.

Zulkifli said foreign participation increased slightly but remained moderate.

He said the average daily foreign gross purchase and sale on Bursa rose to RM955 million but was still below the RM1 billion threshold.

“We believe the retail market is making a comeback although retail investors offloaded RM76 million last week.

“Participation rate increased to RM1 billion, the highest in 12 weeks, and retailers were net buyers on Friday,” he said.

Zulkifli said local institutions supported the market on Friday, but it was not aggressive.

“Indeed, for the week, local funds offloaded RM279.4 million net. Participation rate remained elevated for the fourth week running at RM2.52 billion,” he said.

Zulkifli believes that the market’s reaction could be a knee-jerk response, and any downward pressure was unlikely to persist.

He said last week, global liquidity continued to flow into Asian equity, adding that foreign money flow remained strong in South Korea, Indonesia and Thailand.

Overall, he said, the tide was moderate in the aftermath of the MH17 tragedy.

“There could be some follow-through selling this week, as the FBM KLCI broke the short-term support on Friday. Otherwise, the market’s fundamentals remain intact,” he said.



This article first appeared in The Edge Financial Daily, on July 22, 2014.