In its weekly fund flow report, MIDF research said year to date, the local stock exchange recorded foreign net inflow of RM1.19bil, which was more than half of what was seen during the same period last year.
"In comparison with the 4 ASEAN markets we track, Malaysia currently has the second lowest foreign net inflow with Indonesia remaining the leader with a foreign net inflow of USD997.7mil," it said.
The increase over the week of Feb 4 to 8 came despite there only being three trading days over the festive week.
Trading on Chinese New Year eve recorded foreign net inflow of RM49.1mil over the half-day session.
On Thursday, foreign net inflow rose to RM89.4mil, partially due to the 0.53% appreciation of the local currency against the greenback as the ringgit tracked a recovery in crude oil and palm oil prices.
The momentum slowed on Friday to a net money inflow of RM24.6mil.
Comparatively, foreign investors were net sellers in other Asian markets such as South Korea, Thailand and Indonesia amid renewed trade concerns over US President Donald Trump's comment that he would not be meeting his Chinese counterpart before the March 1 deadline on new trade tariff hikes.
However, participation among all investor groups declined over the week with foreign investors posting the biggest weekly drop in average daily traded value of 43.2% to fall below the RM1bil mark.
Among individual stocks, My EG Services Bhd registered the highest net money inflow of RM3.56mil despite its share price losing 1% over the week.
The counter underperformed the local market, which gained 0.18% although MIDF research noted that net money inflow amid a retreating share price may indicate a buy on weakness stance among some investors.
British American Tobacco Bhd recorded the second highest money inflow of RM2.51mil while its share price lost 2.92%. Lafarge Malaysia rounded out the top three with a net money inflow of RM2.07mil while its share price rose 2.14% over the week.
"It is notable that the net money outfl ow amidst advancing share price may indicate a sell on strength stance among some investors," said MIDF.
Recording the highest net money outflow for the week, Malayan Banking Bhd saw net offshore selling of RM23.85mil although its stock price gained 0.42%.
Petronas Chemicals saw net foreign selling of RM12.20mil while its share price remained unchanged, while Petronas Gas saw a net foreign selldown of RM9.19mil with a 0.11% dip in share price.
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