UOB Kay Hian's top picks are Gamuda, Tenaga, Genting Bhd and Bumi Armada,
KUALA LUMPUR: Foreign fund net outflow from Bursa Malaysia declined to RM3bil in 2016, a stark contrast from the high of RM19.5bil of net outlfow in 2015, according to MIDF Research.
It said on Tuesday Malaysian equited had been subjected to foreign money attrition since early May and appeared to continue throughout June and July, yet tapered down in August and September.
However, with the uncertainty leading to the US election in November and the subsequent Donald Trump’s shock victory, the foreign money attrition resumed in October until year-end.
“During the last week of 2016, the Malaysian equity foreign fund flow remained negative. The net amount sold by foreigners on Bursa was -RM31.2mil, albeit a much smaller amount compared to the prior week's figure of -RM481.7mil,” it said.
MIDF Research pointed out that throughout the whole week, on net daily basis, foreign investors have been liquidating their investments with exception on Wednesday which saw a net foreign inflow of RM57.5mil. The highest attrition was on Tuesday of -RM70.1mil.
Retail investors gross participation rate continued to expand to RM429.6m from RM392.6mil in the prior week. The institutional investors gross participation rate also improved to RM1.92bil from RM1.66bil in the prior week.
The research house said Tenaga Nasional registered the highest net money inflow of RM25.09mil last week. Accordingly, its share price outperformed the broader market with a 1.76% gain while the FBM KLCI advanced by a smaller 1.52% during the week under review.
CIMB recorded the second highest net money infl ow of RM5.92mil. However, its share price underperformed against the market benchmark with a -1.53% loss during the review week.
“It is notable that net money inflow amidst retreating share price may indicate a buy on weakness (BOW) stance among some investors,” it said.
After market close, CIMB announced its plans to divest its 18.21% stake in Bank of Yingkou Co. Ltd in China for 1.51bil yuan (RM972mil). The disposal price values the stake at about one timethe price-to-book value ratio.
MIDF Reseearch said Public Bank saw the largest net money outflow of –RM12.36mil last week. Accordingly, its stock price performance lagged the market benchmark with a mere 0.20% gain vis-à-vis the FBM KLCI which advanced by a larger 1.52% during the review week.
The research house noted that net money outfl ow amidst advancing share price indicates a sell on strength (SOS) stance among some investors.
Genting Plantations recorded the second largest net money outfl ow –RM9.38mil during the weekunder review.
In spite of the outflow, its share price outperformed the market benchmark with a 2.08% weekly gain which may nonetheless attract a SOS stance among some investors.
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