Foreign investors back on Bursa with a bang

PETALING JAYA: Foreign investors appear to be making a comeback after three weeks of heavy selling of Asian equity, with the tide reversing suddenly on Bursa Malaysia last week, said MIDF Research.
“After dumping shares listed on Bursa in the first three weeks of 2016, foreign investors returned with a proverbial bang last week, mopping up local shares at a rate not seen for an extended period of time,” it said in its fund flow report yesterday.
The total amount of equities purchased by foreigners, net of sales, hit RM1.23 billion last week. The estimation is based on transactions in the open market and excluded off market deals.
“Any amount exceeding RM1 billion is a rare occurrence for the Malaysian market, and last week’s numbers were the highest since the first week of April 2013, just prior to the General Election (GE),” it added.
Net foreign buying was recorded throughout the week. The buying picked up on Wednesday and exceeded RM300 million on Thursday, the first time the threshold was surpassed since Oct 9 last year.
MIDF Research said the buying turned into a frenzy on Friday as foreign investors loaded up RM706.1 million, the highest since the RM1.43 billion and RM989.8 million purchased on May 6 and 7, 2013 respectively, in the aftermath of the GE.
“Last week’s strong foreign purchases meant that the outflow for the month of January shrunk to only RM975 million net. For the entire 2015, the net outflow was RM19.5 billion,” it said.
Foreign participation rate (average daily traded value of shares) surged last week to RM1.37 billion, the first time it exceeded RM1 billion this year and the highest since the trading week ended Oct 16.
“On Friday, foreign participation hit a massive RM2.46 billion, only the eighth occasion that the RM2 billion had been broken since the start of 2015,” it added.
Local institutions and retailers took the opportunity of foreign buying to offload RM1.12 billion and RM117 million respectively.
The participation rate of local institutions surged to RM2.84 billion but retail activity remained surprisingly subdued, with trade averaging RM713 million, dropping from RM827 million the week before.