KUALA LUMPUR: Foreign funds flowed into Bursa Malaysia in the week ended Feb 24, 2023, just as sharp selling pressure hit regional markets.
For the second week in a row, foreign investors were net buyers of Malaysian equities, with a net foreign inflow of RM246.2mil.
"They have been accumulating stocks listed on Bursa Malaysia ahead of the revised Budget 2023 announcement on Friday that came with a +4.2% increase in allocations to RM388bil," said MIDF Research in its weekly fund flow report.
The research firm reported that of the eight Asian exchanges it tracks, only Malaysia and Indonesia recorded net inflows over the week.
Investors have been selling down global equities in recent weeks amid rate hike fears as US economic data pointed to persistent inflation.
It was announced that the personal consumption expenditures (PCE) price index in the US rose 5.4% year-on-year in January 2023.
In January itself, prices were 0.6% month-on-month higher, its highest rise since August 2022.
"This further strengthened the notion that the Fed may have to keep rates higher for longer, which was similarly suggested in the recent Federal Open Market Committee (FOMC) meeting, as seen in the minutes released last week," said MIDF.
In Malaysia, the three sectors that most benefited from the net foreign inflows were financial services (RM111.4mil), energy (RM60.9mil) and healthcare (RM54.8mil).
The sectors with the highest net outflows were plantation (RM38.3mil), consumer products and services (RM28.1mil) and property (RM11.6mil).
Local institutions however maintained their net selling stance for the second straight week with a recorded net outflow of RM3.79.1mil.
Local retailers were net buyers over the week with RM132.9mil.
"In terms of participation, there was an increase in average daily trading volume (ADTV) among foreign investors by +10.0% while retail investors and local institutions saw declines of 0.7% and -4% respectively," said MIDF.
