Local institutional investors turn net buyers

PETALING JAYA: After five consecutive weeks of net selling, local institutional investors finally turned net buyers in the week ended Sept 9.

With a net fund inflow of RM121.1mil, the institutional investors provided support for the bourse as local retail investors and foreign investors turned net sellers.

According to CGS-CIMB Research, local retail investors net sold RM46mil worth of equities, following four straight weeks of net buying.

Meanwhile, foreigners recorded a net fund outflow of RM42.5mil last week, after seven straight weeks of net buying.

Year-to-date until Sept 9, foreign investors had net bought RM8.1bil of Malaysian equities.

Local retail investors also registered a net fund inflow of RM1.8bil.

In contrast, local institutional investors’ net selling year-to-date was worth RM10.1bil.

CGS-CIMB Research highlighted that local institutions were net buyers of the industrial and technology sector in the week ended Sept 9.

Local retail investors were net sellers of the technology and industrial products sectors, while foreign investors were net sellers in the industrial products and plantation sectors.

CGS-CIMB Research also noted that foreign shareholdings in Malaysian equities fell 0.4 percentage points to 20.2% as at end-July 2022.

This compared to 20.6% as at end-June 2022.

“The declining trend in foreign shareholdings started in May 2018, specifically after the 14th General Election or GE14 on May 9, 2018, when Pakatan Harapan won a simple majority in Parliament, heralding the first change in government in Malaysia’s history.

“Since then, the foreign shareholding level has fallen 4.1 percentage points from its peak of 24.2% in March 2018 to a trough of 20.1% in February 2022 due to political uncertainty,” it said in its strategy note yesterday.

Breaking down by stocks, CGS-CIMB Research said that foreign institutional investors’ top-three net buy counters in the week ended Sept 9 were Gamuda Bhd, Telekom Malaysia Bhd (TM) and CIMB Group Holdings Bhd.

Meanwhile, the top-three net sell stocks last week were Petronas Chemicals Group Bhd (PetChem), MyEG Services Bhd and RHB Bank Bhd.

As for local institutional investors, the top-three net buy stocks were PetChem, MyEG and Press Metal Aluminium Holdings Bhd.

Their top-three net sell stocks, on the other hand, were Gamuda, TM and Malayan Banking Bhd (Maybank).

Retail investors’ top-three net buy stocks last week were Genting Bhd, Maybank and Metronic Global Bhd.

The top-three net sell stocks were Press Metal, SFP Tech Holdings Bhd and MyEG.

Commenting on the market direction this week, CGS-CIMB Research expects it to stay weak ahead of the Federal Reserve meeting on Sept 20 to 21.

It is noteworthy that the benchmark index, the FBM KLCI, rose 0.4% week-on-week (w-o-w), potentially due to improved global market sentiment as rate hike concerns subsided.

“The top performing sectors last week were industrial (3% w-o-w), transport (2.2% w-o-w) and technology (1.8% w-o-w).

“The worst-performing sectors last week were real estate investment trust (1.1% drop w-o-w), consumer (0.3% fall w-o-w) and finance (0.3% w-o-w).

“Average daily trading volume declined 14.6% w-o-w to 2.4 billion trades, and average daily trading value fell 14.5% w-o-w to RM1.8bil last week.

“Retail investors’ share of total trading value was 25.9% last week, while that of institutional investors was 47.3%, proprietary investors 15.6% and nominee investors 11.1%,” according to CGS-CIMB Research.

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