KUALA LUMPUR (March 2): Institutional investors flocked back to the market after the Chinese new year break, but retailers remained on the sideline during the week ended Feb 27, according to MIDF Research.

In his weekly fund flow report Monday, MIDF Research head Zulkifli Hamzah said  that while foreign investors might be making a comeback on Bursa, it was still early days to draw any meaningful conclusion.

He explained that after two weeks of selling, investors classified as “foreign” bought, on a net basis, local equity in the open market amounting to RM175 million net.

Zulkifli said the purchase was entirely attributable to the trades on Friday, as foreign investors were net sellers, albeit marginally, from Monday through to Thursday.

He said foreign trading was lacklustre during the first four days of the week, but came alive on Friday when an amount of RM282 million was mopped up.

He said that was the highest since June 10, 2014.

Zulkifli said last week’s purchases reduced the cumulative net foreign outflow for 2015 to RM2.82 billion.

He said the cumulative foreign outflow for the entire 2014 was RM6.9 billion.

“Foreign participation rate (daily average gross purchase and sale) surged to RM1.24 billion, the highest this year.

“On Friday, gross value traded hit RM2.15 billion, the highest since March 21, 2014,” he said.

Zulkifli said local institutions sold marginally last week at RM86 million, as participation rate rebounded to RM2.2 billion.

He said local institutions had absorbed RM3.18 billion net so far this year, adding that in 2014, they bought RM8.2 billion net.

“Retailers were still slow off the mark after the break. Trading activity was listless at only RM799 million participation rate.

“Retailers sold RM88.6 million last week, the sixth straight week of selling,” he said.

Commenting on the region, Zulkifli said the performance of equity markets around the world turned uneven last week.

“We detect a divergence in the fortunes of markets.

“In the U.S, focus shifted away from equity to bonds and treasuries after Chair Yellen indicated that the Fed may not raise interest rate so soon. European markets rallied as Greece received a lifeline,” he said.

Zulkifli said global investors snapped up Asian shares after the Chinese New Year break.

He said there had been a tidal wave of global money into Taiwan in the new Lunar Year. Korea also recorded its highest net inflow of foreign funds into its equity market this year

Meanwhile, he said Thailand appeared to be struggling to retain foreign portfolio capital while Indonesia remained the most favoured equity market in South East Asia

“On Bursa, there was no Lunar Year rally in February.

“However, the KLCI and FBM70 indices overcame challenging market conditions to register a gain of 2.2% and 1.8% respectively for the month. It was the best February performance for the FBM70 in eight years,” he said.