Foreign buying on Bursa Malaysia falls to 6 week low

KUALA LUMPUR: Foreign investors purchase of Malaysian equities extended for the sixth week until April 24 but the buying seemed to have tapered off, according to MIDF Equities Research.

It said on Monday foreign investors net buying last week amounted to RM163.3mil on a net basis last week, but it was the lowest in the six weeks. 

“The ?ow of fund was erratic, with foreigners buying heavily on Tuesday, only to sell the following two days.

“In April, until last Friday, foreign investors had bought a cumulative RM733.7mil worth of equities in the open market on Bursa. In March they of?oaded -RM539.9mil net.

“For 2015, last week’s purchase reduced further the cumulative net foreign out?ow to -RM2.62bil. In comparison, the cumulative foreign out?ow for the entire 2014 was -RM6.93bil,” it said.

MIDF Research said foreign presence on Bursa eased suddenly last week. Participation rate of foreign investors fell 16% to its third lowest this year. The daily average gross purchase and sale was only RM878mil. It is apparent that the actions had been in the other markets in Asia.

“Local institutions took advantage of foreign buying to sell -RM66.9mil net last week. Participation rate eased to RM2.27bil average daily, but was still at an elevated level nevertheless. Local institutions have absorbed RM3.65bil net so far this year. In 2014, they mopped up RM8.18bil net.

“Retailers remained on the selling mode for the sixth consecutive week. The amount sold eased to -RM96.4mil, the lowest in four weeks. Retailers have sold a cumulative -RM1.0bil net so far this year,” it said.

MIDF Research said retail players had been net sellers in the last four years, indicating the weak state of the Malaysian retail market currently.

Interestingly, retail participation rate rose to its highest this year, with average daily trade at RM1.0bil.