Foreign funds continue to reduce stakes in Malaysian equities

  • Business
  • Monday, 17 Feb 2014

KUALA LUMPUR: Foreign funds sold net RM760.20mil of Malaysian equities in the week ended Feb 14 which was a slight decline from the net selling of RM1.10bil in the week before, says MIDF Equities Research.

It said on Monday it was the 18th out the 19 weeks where foreign funds were net sellers.

MIDF Research said daily outflow was capped at below RM250mil for the first time since the first week of trading this year.

So far in 2014, daily net sale exceeded the RM500mil level only once compared with 6 times in 2013. It was in the RM300mil to RM500mil bracket only three times, compared with 11 times in 2013.

"Year-to-date, a total of -RM5.54bil of foreign money had exited Malaysian equity. In the last 19 weeks (that is during the current phase of foreign selldown), a total of -RM11.21b of foreign money had exited Malaysian equity," it said.

MIDF Research said that translated into an average of -RM590m a week, an increase from -RM580m the week before.

In its outlook, the research house said the market has overcome the difficult hurdles this year and better days ahead beckon.

“For Malaysia, the latest numbers on the current account and the government's fiscal position show good improvement and are reasons for investors to cheer,” it said.

The country’s current account showed the surplus increased to RM16.2bil in the fourth quarterof 2013 (Q4,2013), from RM9.8bil in 3Q13. Although as a percentage of GNI, the current account surplus dropped to 3.9% in 2013 from 6.3% in 2012.

MIDF Research said with recovering global trade, it expected that the current account balance would move back to comfortable level this year.

“We believe investors' optimism towards the economy is improving with the numbers released last week. Bond yields in general eased last week, a sign perhaps that demand for ringgit bond (especially risk-free) is returning, especially by foreign investors,” it said.

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