MIDF: Foreign funds enter Malaysia at heightened pace

Kuala Lumpur: Global investors entered Malaysia for the second week in a row but at a heightened pace last week, said MIDF Amanah Investment Bhd.It noted that based on preliminary data from Bursa Malaysia, which excluded off market deals, the net amount acquired by foreign investors in the bourse last week amounted to RM190.9 million, a huge improvement from the RM4.5 million bought in the week before the long weekend.

Foreign buying occurred on three out of five trading days last week with Monday recording the highest daily inflow in 10 trading days, amounting to RM164.3 million net amount, pushing the FBM KLCI by 1.04 per cent to 1,857 points.

"We reckon that foreign investors were pumped up to start the first day of trading for the Year of the Dog as there were ready to track gains from Wall Street in the preceding week," said MIDF in its weekly fund flow report Monday. It added that foreigners continued buying on Tuesday but at a measurable pace of RM31.8 million amid a lack of fresh catalysts as the US markets were closed overnight on Monday.

However, Wall Street's slump on Wednesday spurred by minutes of the US Federal Reserve's January meeting, indicating the need to raise rates caused a pullback in Asian markets, including Malaysia on Thursday.

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"Hence, it was no surprise that foreign investors sold US$30.8 million net that day. Interestingly, the FBM KLCI's 0.17 per cent decline on Thursday was not as bad as other Southeast Asian peers," said MIDF.

The FBM KLCI rebounded to end the week at 1,862 points supported by foreign buying totalling RM48.5 million net.

"We note that sentiment was uplifted on Friday after Public Bank's shares hit a record high of RM22.90 following its positive financial year ended Dec 31, 2017 results released the day before," said MIDF.

So far in 2018, foreign investors have accumulated RM2.1 billion net of local equities, a stark contrast from the RM1.3 billion bought in the same period of 2017.

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"It is noteworthy that foreigners remain active as the foreign average daily trading value (ADTV) has been above the RM1 billion for eight straight weeks.

"The retail ADTV, meanwhile, recovered, increasing by 53 per cent for the week to RM1.0 billion from RM663 million," said MIDF. – Bernama

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