PETALING JAYA: Foreigners who had shied away from Bursa Malaysia in the last two years, have been steadily buying for more than a month now. They hit a high last week, signalling their firm re-entry into the stock exchange.
Last week, foreign investors were net buyers, investing RM1.76bil in the exchange, the highest since after the 13th general election (GE13) in May 2013.
Calling it a “tidal wave” on Bursa Malaysia, MIDF Resarch noted that foreign liquidity dominated trading volumes and value in line with rising optimism towards the Malaysian market.
The last time the net amount had even exceeded RM1bil was in March last year.
Bursa Malaysia also saw overall turnover hit a staggering 6.01 billion shares yesterday – the biggest one-day volume since August 2014. Total turnover was valued at RM3bil.
The benchmark index closed at 1,749.41 points, representing a 0.24% increase. It is the highest closing since August 2015.
The broader market remains in a positive mood with 546 gainers versus 421 losers while 355 counters were untraded.
Among Bursa Malaysia’s top traded stocks by volume, five counters broke the 200 million shares mark in total intraday turnover. The penny stocks that have seen renewed buying interest recently include PUC Founder (MSC) Bhd , Dataprep Holdings Bhd and Olympia Industries Bhd .
“We are seeing improved investor confidence in the markets over the past two weeks. After the first wave of indiscriminate buying of blue chip counters, now we are seeing a flow of funds into mid-caps and penny stocks,” said one remisier of a local investment brokerage.
While blue chip stocks seem to have taken a breather following a strong performance throughout last week, yesterday logistics players and penny stocks were the clear winners (see story on page 2).
On the flow of foreign funds, MIDF Research said in a fund flow report that foreign investors had been net buyers on the local stock exchange for six consecutive weeks.
As of last Friday, it noted, foreigners were net buyers on the Bursa Malaysia for six consecutive days. At the same time, local institutions realised some profits after offloading RM1.58bil worth of shares last week.
“On Friday, the buying turned into a frenzy. Foreigners acquired a massive RM816mil, the highest since May 7, 2013, two days after the GE13,” it said.
The research house said the average amount taken up per day during the six days was RM305mil.
“In March 2016, when trading on Bursa Malaysia was this intense, the average amount mopped up was only RM264mil,” it added.
As a percentage of total volume traded, foreigners dominated the market with average daily trade value (ADTV) rising to RM1.69bil last week. It was a 71% increase compared with the preceding week.
“The return of foreign investors has accorded a much needed breathing space for local investors to lighten their position and realise profits,” MIDF Research said.
The research house said the retail market remained vibrant as retailers took advantage of the foreign liquidity to offload RM180mil last week.
“Retailers and local institutions who have been buying when the market was weak for more than a year now obviously took advantage of the buying spree by foreigners,” said a dealer.
Retail ADTV climbed to RM1.2bil last week, exceeding RM1bil for the second consecutive week. Foreigners have been net sellers of Bursa Malaysia for the past two years. Last year the net foreigner outflow of funds from Bursa Malaysia was RM3.2bil, a considerable reduction compared to RM19.7bil in 2015.