Foreign funds turn net sellers in week ended Jan 20

Bank Islam Brunei Darussalam, aims to raise as much as US$500mil (RM2.13bil) in an IPO on Bursa Malaysia.

KUALA LUMPUR: Foreign investors consolidated their position last week, turning net sellers after two weeks of buying on Bursa Malaysia, according to MIDF Research.

The research house said international funds turned net sellers in the third week of 2017 after two weeks of buying, but the amount sold was relatively marginal.

“The net amount sold by foreigners on Bursa was only RM143mil, compared with RM485mil inflow the fortnight prior. For the year until Friday, foreign flow remained in the surplus, at RM341.6mil,” MIDF said in its weekly report.

Indeed foreign investors were net buyers on Wednesday and Thursday. On Friday, President Trump’s inauguration day, foreign investors reverted to selling, but the amount was also marginal.

“Last week’s flow of fund data in the local equity market reflects regional trend as global investors withdrew from the market amid the changing of the guards in Washington. It remains to be seen whether foreigners will be back in the market this week. Foreign participation fell 16% last week as the average daily trade value (ADTV) amounted to only RM709.7mil,” it added.

MIDF noted that retailers participation rate, based on the ADTV fell 21% to RM555.5mil. Based on the trend in money flow, MIDF expects the market to perform better post-Chinese New Year.

Last week, Petronas Gas registered the highest net money inflow of RM30.46mil week ended Jan 20, 2017. Its share price, however, lagged with a 3.17% loss against the FBM KLCI which declined by a smaller 0.46% during the week under review.

Nonetheless, it is notable that net money inflow amidst retreating share price may indicate a buy on weakness (BOW) stance among some investors.

Malayan Banking (Maybank) recorded the second highest net money inflow of RM10.43mil while British American Tobacco saw the third highest net money inflow of RM9.65mil.

Meanwhile, Sime Darby saw the largest net money outflow of RM23.74mil last week. IHH Healthcare recorded the second largest net money outflow of RM5.21mil.

 UMW Holdings registered the third largest net money outflow at RM5.12mil in the review week but its share price massively outperformed with a 10.43% rise.

In related news, UMW Holdings is exiting from oil and gas business with the demerger of UMW Oil & Gas via the distribution in-specie of all UMW Holdings’ 55.7% stake in the latter.

However, it is notable that net money outflow amidst advancing share price indicates a sell on strength (SOS) stance among some investors.