Foreign funds sold RM535.2 million Malaysian equity last week

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KUALA LUMPUR (Jan 12): Investors classified as “foreigners” sold RM587.2 million of Malaysian equity in the first six trading days of 2015 on Bursa Malaysia, according to MIDF Research.

In his weekly Fund Flow report today, MIDF Research head Zulkifli Hamzah said that after six trading days into 2015, the writing on the wall is not so auspicious for Malaysia, although he added that he would not interprete it as being ominous.

He said that last week, foreign investors sold local equity in the open market (i.e excluding off-market deals) amounting to RM535.2 million net.

He eplained that in the first six days, the net outflow was  M587.2 million, higher than the corresponding period in 2014 of RM497.2 million.

Zulkifli said the net sale by foreigners had already broken the RM200 million mark last Tuesday.

He said that in 2014, there had been 23 days during which the daily net sale exceeded the threshold.

“On a slightly positive note, foreign funds turned net buyers on Friday, albeit marginally to the amount of RM24.2 million.

“We note that foreign participation surged last week to RM1.1 billion. It was the first time in three weeks that the daily average gross purchase and sale surpassed the RM1 billion mark, which we deem as active,” he said.

Zulkifli however said that foreign volume peaked on Wednesday and had retreated thereafter.

He said local institutional investors supported the market last week, mopping up RM433.3 million, but it was not on aggressive trading as participation rate was less than RM2 billion at RM1.9 billion.

He said the average institutional participation rate was RM2.3 billion in 2014.

Zulkifli said local retailers also appear to be rather sanguine, mopping up RM101.9 million, the first buying in four weeks.

“However, only the brave ones appear to be dabbling in the market as the participation rate was only RM580 million. The average in 2014 was RM873 million,” he said.

Commenting on the region, Zulkifli said that after the first 6 trading days (fewer for some markets), it was apparent that the fate of the various equity markets was diverging 2015.

He said that Wall Street, the global bellweather market, may be looking at a profit-taking year, after the record-breaking 2014.

Zulkifli said the early pacers this year had all been from Asia, with the Philippines and Thailand in the lead hitting the ground running.

“However the flow of fund data suggests that global investors are still in the process of forming their conviction towards general Asia for 2015.

“Trading in the first six days suggests that after early hesitations, foreign investors appear to be giving Indonesia the vote of confidence with strong inflow on Friday.

“The Philippines market is also still in investors’ radar screen, even after the PSEi index had risen for six years in a row,” he said.