KUALA LUMPUR: Foreign funds staged a solid comeback to Bursa Malaysia last week as they turned net buyers after eight straight weeks of selling, according to MIDF Research.
“Based on data from Bursa, foreign investors mopped up RM192.1mil net of local equities last week. So far in 2019, there have been 13 weeks of foreign net buying, ” MIDF said in its weekly fund flow report.
The research house said Bursa had a solid start to the week after a three-day weekend as international funds flocked into the Malaysian market, buying RM197.3mil net on Tuesday.
“This is the highest foreign net inflow seen in a day since early June 2019, cheered by a rally on Wall Street amidst signs of progress in relation to trade talks between the U.S and China, ” MIDF said.
Foreign investors continued to snap up local equities on Wednesday but at a slower pace of RM99.7mil net.
This was in conformity with other markets under our coverage such as Thailand, Indonesia, the Philippines, India and Taiwan, MIDF said.
The research house said optimism was stoked by China’s move to exempt 16 types of products originating from the U.S from additional retaliatory tariffs effective on Sept 17 with a one year validity period.
“Nevertheless, offshore investors took a breather on Thursday, disposing RM49.9mil net of local equities.
“President Trump’s postponement of the 5% of extra tariffs on Chinese goods by two weeks was overshadowed by Bank Negara Malaysia’s decision to keep the overnight policy rate (OPR) unchanged at 3.0%, ” MIDF said.
Foreign net selling activity continued on Friday at a slightly faster pace of RM55mil despite the aggressive move by the European Central Bank to cut interest rates further below zero.
“For the month of September, international investors have thus far sold RM86.5mil net, the lowest amongst the seven Asian markets we monitor.
“On a year-to-date basis, international funds have taken out RM7.43bil worth of local equities from Bursa, ” MIDF said.
In terms of participation, foreign investors experienced the largest weekly gain of 15.6% in the average daily traded value (ADTV) to breach the RM1bil mark at RM1.15bil.
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