Foreign funds flow into Bursa following Fed rate pause

KUALA LUMPUR: The US Federal Reserve's decision to maintain the interest rate while signalling for rate cuts next year sent foreign investors back into Bursa Malaysia over the previous week.

Foreign investors became net buyers of domestic equities to the tune of RM143.3mil after having been net sellers in the earlier week.

According to MIDF Research, the net inflow of foreign funds began on Thursday following the announcement of the Fed's dovish announcement.

Foreign funds net bought RM125.3mil on Thursday and RM190.2mil on Friday, overturning their net selling amount of -RM172.0m from Monday to Wednesday," said the research firm in its weekly fund flow report.

The three sectors with the most net foreign inflows last week were utilities (RM91.2mil), healthcare (RM65.9m) and technology (RM33.5mil).

Meanwhile, the top three sectors with net foreign outflows were Financial Services (RM66.8mil), industrial products and services (-RM21.2mil) and Energy (RM19.2mil).

Local institutions remained net buyers for the second week with a reduced net inflow of RM82mil, compared to RM194mil in the previous week.

Sectors that were must purchased by local institutions were plantations (RM58.6mil), healthcare (RM55.1mil) and financial services (RM51mil).

Local retailers turned net sellers to the tune of RM225.5il after two weeks of net buying.

In terms of participation, there were increases in average daily trading volume (ADTV) across the board - local retailers (22.7%), local institutions (31.9%), and foreign investors (62.8%).

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