KUALA LUMPUR: Foreign funds turned buyers in the week ended Feb 28 as they bought net RM296.20mil of Malaysian equities but local funds were net sellers to meet their dividend targets, MIDF Equities Research said.
The research house said on Monday foreign selling stopped, for the time being, in the week ended Feb 28.
"After selling in 19 out of the last 20 weeks, including the last seven consecutive weeks, foreign investors turned net buyer of Malaysian stocks. Last week, foreign portfolio investors made a net purchase of Malaysian shares in the open market (that is excluding off-market transactions) amounted to +RM296.2mil. In the preceding 20 weeks, the net sale averaged -RM565.3mil," it said.
MIDF Research said the point of reversal was last Thursday when foreign funds bought +RM58.1mil net. On Friday, the net purchases surged to +RM419.1m, the highest recorded in one-day since May 8, 2013 after the General Election.
Foreign participation rate was still below the RM1bil mark. Average daily foreign participation rate (average daily gross purchase and sale) did surge +35% to RM986mil from RM732mil the week before. However, it was still below the RM991mil average per week in 2013. Indeed, foreign participation had exceeded RM1bil in 25 weeks since the start of 2013.
The research house said retail investors' optimism also spiked, as reflected by their net purchase amount of +RM164.9mil, the highest since mid-November last year. Daily participation rate stayed above the RM1bil mark for the second consecutive week, at RM1.07bil, compared with RM1.28bil the week before.
"Meanwhile local institutional funds are currently aggressively offloading their position and realising profit early in the year in order to meet their dividend targets. Local funds sold -RM461.1mil net last week, the highest since mid September 2013.
"Participation rate remained elevated at RM2.46bil, the second highest since August 2013. Indeed, local institutional participation had exceeded the RM2bil mark in the last eight weeks," it said.
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