Foreign investors net buyers in holiday-shortened week

PETALING JAYA: The net amount acquired by foreign investors during the 3.5 days of trading last week amounted to RM4.5 million net, the smallest amount bought in a week thus far this year, based on preliminary data from Bursa, which excluded off market deals.
“After a huge sell-off in the preceding week, foreign investors increased their exposure in stocks listed on Bursa ahead of the Chinese New Year break,” MIDF Research said in its fund flow report today.
Foreign funds were net buyers on all trading days except Monday, which saw an attrition of RM230.3 million net. Meanwhile, foreign buying was the highest on Tuesday at RM112.7 million net with trading value exceeding RM1.5 billion, the highest in four trading days.
On Wednesday, the announcement of Malaysia’s gross domestic product expanding by 5.9% year-on-year in 2017 compared with a 4.2% expansion in 2016 saw the FBM KLCI close at a four-day trading high of 1,835 points. Nonetheless, foreign buying only stood at RM62.4 million net, the second lowest during the week as foreigners remained anxious ahead of the US inflation data.
The FBM KLCI inched higher to 1,838 points on Thursday as investors shrugged off strong US inflation data but foreign buying declined further to RM59.7 million net as foreign investors entered risk-off mode right before the Chinese New Year holiday. Overall, Malaysia bucked the trend with an inflow, as the Philippines, Thailand and Indonesia all experienced attrition.
Foreigners have so far acquired RM1.86 billion net in the first seven weeks of 2018, higher than the RM1.11 billion recorded during the same period in 2017.
Although the foreign average daily trading value declined by 35% from RM1.61 billion in the week before to RM1.04 billion last week, we deem the foreign participation to be still healthy given that last week was a short trading week and Thursday was a half trading day.