Foreign funds turn net buyers of RM322.7m

An analyst told Bernama that the macro factors expected to affect the FTSE Bursa Malaysia KLCI next week, includes the Group of Seven(G7) meeting as investors search for clues on the trade outlook, as well as the timing of the next interest rate hike by the US Federal Reserve (Fed) which meets on June 12.

KUALA LUMPUR: Foreign funds returned to Bursa Malaysia last week to the tune of RM322.7mil net of local equities.

MIDF Research reported that after four consecutive weeks of selling, the return of foreign buying offset the RM310.1mil net withdrawn from the local market in the previous week.

Three bank counters saw the highest net money inflows in the week, comprising CIMB Group Holdings, Public Bank Bhd and Hong Leong Bank Bhd.

The highest net money outflows were seen in Nestle (Malaysia) Bhd, Dialog Group Bhd and Petronas Chemicals Bhd.

Over the first two days of the week, there was a foreign outflow of RM124.3mil from the market as US President Donald Trump's talk of imposing more tariffs on China created risk aversion.

However, China's securities regulators pledge to enhance market liquidity had foreign investors coming back on to the local market to a the tune of RM268.7mil net, marking the largest inflow in a day since Sept 21, 2018.

The foreign net buying shrank to RM6.7mil ahead of Budget 2019 before spiking to RM172.2mil on Friday. 

"Aside from the budget optimism, investors on Friday were comforted by the news that President Trump wants to reach a trade deal with China during the G20 summit this month," said MIDF.

The research house noted that October saw a total foreign net outflow of US$1.41bil compared to an inflow of RM66.3mil in September. 

"The year-to-date outflow now stands at -RM9.77b, offsetting approximately 95% of last year’s net inflow. 

"Notwithstanding this, Malaysia still has the second lowest outfl ow amongst the 4 ASEAN markets we monitor."

The average daily traded value (ADTV) of foreign investors was 18.4% higher than the ADTV of the retail market, which rose only 0.3% in the week. The ADTV Of local institutional investors dropped for the second straight week, staying under RM2bil.