Foreign Malaysian stock buying frenzy ends


MIDF Research head Zulkifli Hamzah said sellers overwhelmed buyers in the last two days of last week, with the net amount sold exceeding RM100mil each day. On a cumulative basis, Zulkifli said foreign investors remained net sellers of Malaysian stocks as of Sept 5 amounting to RM1.76bil. In 2013, Malaysia reported a net inflow of RM3bil.

PETALING JAYA: After three weeks of buying frenzy, foreign investors sold Malaysian equity for the first time, albeit a small amount of RM61.2mil last week, according to MIDF Research head Zulkifli Hamzah.

“There is an apparent increase in aversion towards Malaysian equity,” he said in a note to client yesterday.

He said sellers overwhelmed buyers in the last two days of last week, with the net amount sold exceeding RM100mil each day.

On a cumulative basis, Zulkifli said foreign investors remained net sellers of Malaysian stocks as of Sept 5 amounting to RM1.76bil.

In 2013, Malaysia reported a net inflow of RM3bil.

“Foreign participation was elevated last week. The daily average gross purchase and sale rose to above RM1bil for the first time,” Zulkifli said.

However, he said the local participation was declining with the average daily gross purchase and sale falling below RM1bil for the first time in six weeks in the retail market.

He said the local institutional funds remained supportive and mopped up equity worth RM192.9mil last week.

“Participation decelerated further to RM2.35bil, from RM2.59bil the week before,” he said

He said that other Asian emerging markets were making a comeback after being in the shadow of Korea and Taiwan recently.

“For the fourth consecutive week, global funds made a beeline for Asian equities,” he said, adding that countries such as Thailand and Indonesia have regained attention from foreign funds.

Zulkifli said institutional investors were drawn to Thai banking stocks, which were benefiting from the recovery in the domestic economy and a more stable political situation.

However, he said that Malaysia was bucking the trend in international money flow in the equity market.

Banking counters such as Public Bank Bhd and CIMB Group Holdings Bhd were among stocks registering the largest net money outflow.

Zulkifli said that for the fifth time in five weeks, Public Bank registered the largest net money outflow of RM36.7mil due to intense loan competition and rising funding costs which were putting pressure on bank’s forward margins.

Public Bank yesterday closed 12 sen lower at RM19.20 with 3.62 million shares traded.

FBM KLCI inched 0.1% higher at yesterday and closed at 1,807.09 points.

Moving forward, Zulkifli said he saw a “silver lining” in the local semiconductor sector on the back of robust global sales of semiconductor in July and the anticipation of iPhone 6 launch.

Components suppliers such as Inari Amerton Bhd and Globetronics Bhd have been enjoying a bull run since last year.

Zulkifli also said Malaysia had risen four notches in the latest Global Competitiveness Report 2014-2015 of the World Economic Forum (WEF), which was positive for the market.

Meanwhile, the ringgit declined 0.88% to 3.17 against the greenback yesterday from its year to date low of 3.146 on Aug 27, due to selling pressure by foreign funds.

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