‘Foreign funds sell Malaysian equities for second week running’

by **Cals** Wed 20 Jan 2016, 08:46

‘Foreign funds sell Malaysian equities for second week running’

By Surin Murugiah / The Edge Financial Daily | January 19, 2016 : 10:03 AM MYT

This article first appeared in The Edge Financial Daily, on January 19, 2016.

KUALA LUMPUR: Foreign investors sold Malaysian equities for the second week running last week, according to [size=16]MIDF Research.

In his weekly fund flow report yesterday, MIDF Research head Zulkifli Hamzah said it was as bad as the week before, but as foreign liquidity overhang in the local market is low, the intensity of the selldown was not as severe as that seen last year.

He said the total amount of equities sold last week was RM762.9 million.

“This is estimated based on transactions in the open market and excluded off-market deals. It was RM613.7 million the week before.

“Foreign funds were net sellers throughout the week but the amount did not exceed RM200 million during any of the days.

“Foreigners have been net sellers for seven consecutive trading days now,” he said.

Zulkifli said again, selling was heavy last Monday when RM186 million was offloaded.

He said the rate of attrition was relatively unchanged last Tuesday, but receded last Wednesday, adding that selling picked up pace again last Thursday and by last Friday, the offloaded amount surged to RM190.3 million, the highest for the week.

Year to date, foreigners have sold RM1.38 billion net.

“That reduces the estimated amount of foreign liquidity overhang in the market to only RM7 billion, based on our estimate.

“Foreign participation rate [average daily volume] rose last week, but the amount remained below the RM1 billion mark at RM990 million.

“In comparison, participation averaged RM1.05 billion per day last year,” he said.

Zulkifli said local investors supported the market last week, with local institutions and retailers absorbing RM665.1 million and RM97.8 million respectively.

“In 2015, local institutions absorbed a whopping RM21.2 billion, and the market support seemed to be continuing in the first two weeks of the year. The participation rate of local institutions remained elevated at RM2.03 billion.”

He said, except for the last week of 2015, retailers have been conspicuously nibbling in the market in the last six weeks.

Zulkifli said retail participation was healthy last week at RM905 million.

Meanwhile, Zulkifli said turbulence in the global equity markets receded in the second opening week of trading this year.

However, he said markets remained in the red zone, adding that last Friday’s precipitous fall on Wall Street is rather ominous for the week ahead.

He noted that the price of Brent crude oil plunged 6.3% to US$28.94 (RM127.34) per barrel last Friday, its lowest in 12 years, heightening fears over further depression in commodity prices.

“The outflow from Asian equity remained elevated last week. Still, it was not as severe as that seen during many weeks last year,” he said.
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