Foreign funds snap up RM1b of Malaysian equities: MIDF Research


  • Business
  • Monday, 26 May 2014

KUALA LUMPUR: Foreign investors bought about RM1bil worth of stocks listed on Bursa Malaysia in the week ended May 23, which was the highest in a week since May 2013, says MIDF Equities Research.

 

The research house said on Monday it was the fifth consecutive week of buying, as foreign investors added RM999.2mil of Malaysian stocks to their portfolio, via purchases in the open market.

 

“Despite uncertainties elsewhere in Asia, foreign investors kept faith in the local market and were net buyers every single day last week. Indeed, they had been net buyers for 17 straight days as of Friday.

 

“The buying intensity continued to rise, with net-buys averaging RM199.8mil per day, compared with RM164.2mil per day in the preceding week. The weekly mop-up rate was easily the highest this year,” it said.

 

MIDF Research said surprisingly, foreign participation actually declined last week. Average daily foreign participation rate (average daily gross purchase and sale) fell from RM1.25bil the week before to only a moderate RM980mil. That was even lower than this year's average participation rate of RM1bil per day.

 

However, on the upside, the strong foreign purchase in the week ended May 23 reduced the cumulative net outflow from Malaysia in 2014 to a negative RM3.05bil year-to-date. In 2013, Malaysia reported a net inflow of RM3.0b.

 

MIDF Research said however, retail investors remained cautious, selling net RM51.2mil, about as much as that in the week before. Participation also stayed relatively low at RM770mil, only slightly higher than that the week before.

 

“With retail investors relatively quiet, local institutions' trade was a mirror opposite that of foreign funds. Local funds sold net RM948mil in the open market last week and had offloaded net RM2.2bil in the last five weeks. Participation rate of local institutions remained elevated at RM2.4bil, among the highest this year,” it said.
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