Foreign selling on Bursa halts after 10 weeks

by **Cals** Tue 12 Jul 2016, 20:49

Foreign selling on Bursa halts after 10 weeks

By Surin Murugiah / The Edge Financial Daily | July 12, 2016 : 9:54 AM MYT

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This article first appeared in The Edge Financial Daily, on July 12, 2016.

KUALA LUMPUR: Foreigners turned net buyers on Bursa Malaysia last week, albeit marginally, after 10 successive weeks of selling, according to MIDF Research.
In his weekly fund flow report yesterday, MIDF Research head Zulkifli Hamzah said over the three trading days, foreign investors made RM93.5 million net purchase on Bursa, after a negligible RM1.4 million selling the week prior. The estimates are based on transactions in the open market which excluded off-market deals. Bursa was closed last Wednesday and Thursday for Hari Raya holidays.
“We note that the buying momentum from the second half of the preceding week was carried forward as trading commenced on Monday (yesterday), in which foreigners loaded up RM168.8 million. It was the third highest daily buying since April 1 this year.
“However, the buying momentum halted on the eve of the two-day holiday, in which foreign investors reduced their holding marginally by RM8.3 million during the morning session,” he said.
Zulkifli added that foreign selling resumed when Bursa reopened last Friday as foreigners sold another RM67 million.
“Last week’s foreign net buying has effectively lifted the cumulative net foreign fund flow thus far this year into shares listed on Bursa from the negative territory. As of last Friday, the year-to-date cumulative flow into Bursa amounted to an estimated RM58.4 million, up from RM35.1 million the week prior,” he noted.
In retrospect, foreigners had offloaded RM19.5 billion and RM6.9 billion in 2015 and 2014 respectively.
Zulkifli said despite the intermittent trading days last week, foreign participation rate managed to edge up to RM906.5 million from prior week’s RM811.7 million.
He said it was the first time it rose above the RM900 million level after one month of moderate trading at less than RM900 million.
Zulkifli said local institutions sold RM87 million on Bursa last week, their first net selling in 11 weeks.
“Meanwhile, its participation rate declined further to RM1.41 billion from prior week’s RM1.76 billion, amid the short trading week.
“Retail buyers continued to be net sellers for the third week in a row. They sold marginally at RM6.5 million. Meanwhile, their participation rate slowed down to RM384.8 million,” he said.
Commenting on the region, Zulkifli said fatigue hit global equity markets after the robust rally in the week prior. “The market in general lacked new buying catalysts as global investors had fully digested the post-Brexit dovish talks by central bankers worldwide.”
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