KUALA LUMPUR: Foreign buying of Malaysian equities fell sharply in the week ended May 23, declining to a net RM134mil, which was the lowest since January this year, MIDF Equities Research said.
The research house said on Monday foreign investors were getting edgy, as evident by decline and pointed out the overhang of foreign liquidity remained high and that was arguably the biggest risk to Bursa now.
“So far this year, foreign investors have bought net RM18.7bil or net US$6.1bil net of Malaysian equity in the open market compared with net RM13.7bil (net US$4.5bil) in 2012,” it said.
MIDF Research said last week started well with follow-through buying momentum from the preceding week. However, foreign selling started on Wednesday, albeit in small amount before picking up on Thursday.
It said RM228mil net of Malaysia equities were sold on Thursday, the biggest withdrawal in a single day since June 28, last year, mainly due to the meltdown in Tokyo.
As for the local retail market, the research house said it was extremely active last week. There was steady profit-taking from Monday, reflecting the opportunistic nature of the retail participation.
“Surprisingly, despite the relatively sharp turnaround of the market on Thursday, retailers were not heading for the exit door en masse,” it said, pointing out retail investors sold net only RM65mil.
“We believe the retail market has legs. Local retailers are sitting on sizeable cash, having sold net RM5.9bil this year, surpassing the RM4.2bil offloaded in the entire 2012,” it said.
MIDF Research said last week local funds supported the market on Thursday, but remained net sellers for the week, offloading net RM74mil.
It highlighted that local funds remained flushed with liquidity, having sold their equity holdings by a massive RM12.7bil net in the open market this year, compared with RM9.5bil net sold down in the entire 2012.
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