Wednesday, October 20

Foreign buying returns to Bursa after seven weeks of continuous selling

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KUCHING: The seven-week foreign selling streak on Bursa Malaysia was snapped last week as foreign funds entered the Malaysian market albeit at a measurable pace.

Data from MIDF Amanah Investment Bank Bhd (MIDF Research) showed that foreign investors chipped in RM22.7 million net of Malaysian equities last week, which was the lowest weekly attrition recorded thus far this year.

These estimates made were based on transactions in the open market which excluded off market deals, it said.

“Foreign buying occured on the first two days of the week with Tuesday recording the highest amount of RM90 million,” it added in a report yesterday.

“Steady foreign buying on Tuesday – coupled with the upbeat Brent crude oil price the day before -–- lifted the FBM KLCI to 1,751 points, the highest level in 15 trading days.”

MIDF Research said it was noteworthy that the foreign acquistion on Tuesday was in conformity with other Asian markets, namely Korea, Taiwan, Indonesia and Thailand.

“However, foreign investors started to sell off Malaysian stocks thereafter until the week ended on a gradual basis, peaking at minus RM58.3 million on Friday,” it added.

“We reckon that the amped up selling mode on Friday was partly triggered by the concerns over a possible delay in the US tax reforms which dampened risk-on mood.”

Having said that, MIDF Research saw that the local bourse slipped to finish the week at the same level it closed on Monday at 1,742 points.

Due to light foreign buying last week, the cumulative year-to-date inflow slightly increased to RM9.31 billion from RM9.28 billion in the preceding week.

“So far, out of 45 weeks, there has been only 15 weeks of foreign selling – a figure which is still better compared to 2016 which was over 20 weeks,” it added.

“Foreign participation was subdued as the foreign average daily trade value (ADTV) only increased by three per cent to remain below RM900 million.

“The retail market on the other hand had an eight per cent decline in retail ADTV but still remains healthy above the RM1 billion mark at RM1.04 billion.”

Petronas Gas Bhd registered the highest net money inflow of RM18.01 million last week as the company announced its earnings for the third quarter of 2017 (3Q17) of RM417.4 million.

This was compared to RM422.1 million the previous quarter on the back of higher depreciation from completion of capital projects.

Sime Darby Bhd recorded the second highest net money inflow of RM4.56 million, while Genting Malaysia Bhd saw the third highest net money inflow of RM4.12 million.

Meanwhile, Public Bank Bhd saw the largest net money outflow of RM20.98 million last week, followed by Tenaga Nasional Berhad with RM18.56 million and CIMB Group Holdings Bhd at RM13.35 million in the week under review.