A general view shows electronic boards displaying stock movements at Bursa Malaysia on Monday. The ringgit continued its decline in early trade, breaching the 4.25 level to the US dollar for the first time since the Asian financial crisis 17 years ago. EPA
PETALING JAYA: Foreign net buying on Bursa Malaysia has been extended for the eighth week albeit with a marginal inflow, according to MIDF Research.
“Foreign tide-in to Bursa ws marginal last week. The fatigue in foreign net inflow was arguably due to foreigners’ anxiety on the uncertainty surrounding US monetary policy.
“Last week, foreigners on net bought RM49.4mil, down from RM501.5mil the week prior. The estimated fund flow excludes off-market transactions,” it noted in its weekly report.
MIDF said investors classified as “foreigners” were net sellers on Tuesday (RM31.4mil), Wednesday (RM31.4mil) and Friday (RM5.9mil) and were net buyers on Monday (RM53.5mil) and Thursday (RM64.6mil).
“The research house said buying activities among foreigners were much weaker as recent Fed officials’ comments on the timing of US rate hike have potentially kept foreign investors on hold. They were also digesting numbers as companies announcing their earnings during the quarterly financial reporting season,” it said.
As of last Friday, the year-to-date cumulative net foreign inflow into shares listed on Bursa has breached the RM2.5bil level at RM2,540.1mil, up marginally from RM2,490.7mil in the preceding week.
In retrospect, foreigners had offloaded RM19.5bil in 2015 and RM6.9bil in 2014.
MIDF noted that foreign participation rate had deteriorated further last week. It dipped to RM659mil from RM774.9m a week ago. It was the first time it dropped below the RM700mil level thus far this year.
Meanwhile, it has been staying below the RM1bil level for 11 times in the past 12 weeks.
Local institutions were net sellers for the eighth successive week by offloading RM102.8mil. However, the selling has abated compared to RM558.5mil in the previous week.
Meanwhile, the participation rate declined slightly to RM2.02bil from RM2.4bil week-on-week.
“Retail buyers continued to be net buyers on Bursa for the second week. They bought RM53.4mil last week, after a net buying of RM57mil in the week before. Their participation rate dwindled significantly to RM624.6mil from RM812m the week prior,” MIDF said.
Last week, Malaysia Airports registered the highest net money inflow of RM11.87mil. Nonetheless, its share price slightly under-performed the broader market as it ended lower by 0.32% while the FBM KLCI was down by a shallower 0.27% during the week under review.
It is notable that net money inflow amidst retreating share price may indicate a buy on weakness (BOW) stance among some investors.
MSM Malaysia came in second with RM9.43mil net inflow and its share price outperformed the market benchmark as it ended unchanged during the review week. The company recently announced higher 1HFY16 revenue (8.2% yoy) but lower profit (44.7%) due to higher raw sugar price.
Genting Plantations recorded the third highest net money inflow of RM5.13mil. Likewise, its share price outperformed with a gain of 0.38% during the review week. The company recently announced marginally higher profit of RM40.8mil (2% yoy) in 2QFY16.
On the other hand, Hong Leong Bank saw the largest net money outflow of RM12.33mil during the review week and its stock price underperformed the market benchmark with 0.46% weekly performance vis-à-vis a smaller 0.27% retreat in the FBM KLCI.
Telekom Malaysia came in second last week with a net outflow of RM8.57mil while IHH Healthcare registered the third largest net money outflow at RM5.64mil in the review week.
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