Bursa rises as global funds turn net buyers

This is helped in part by the change in sentiment among foreign investors, according to MIDF


Foreign investors bought a net RM348.9 million worth of stocks on Bursa Malaysia last week, going long after 13 uninterrupted weeks of net selling, including being net short by RM498.4 million in the prior week.

The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) rose a further 20 points week-on-week to 1,780 points last week, gaining for the fourth week in a row — helped in part by the change in sentiment among foreign investors.

According to MIDF Amanah Investment Bank Bhd’s latest fund flows report, global funds have been the net buyers of Malaysian stocks for 15 out of 31 weeks.

“Based on the preliminary data from Bursa Malaysia, which excluded off-market deals, the global funds accumulated RM348.9 million net of local stocks.

“After 13 uninterrupted weeks of foreign net selling of stocks listed on Bursa Malaysia, global investors finally made their way to Malaysian shores last week,” its report noted yesterday.

The research house said the selling continued into last week with a marginal attrition level of RM39.2 million net till last Tuesday, which was the last trading day of July, when foreign investors mopped up net RM343.5 million worth of local stocks, the largest inflow in a day since April 19, 2018, as the visit of China Foreign Minister Wang Yi to Malaysia increased the prospects of better bilateral ties between the two nations.

Foreign net buying resumed last Wednesday at a slower pace of RM151.3 million worth, following the US and China reviving negotiations to defuse trade tensions.

“The FBM KLCI took the cue of the news and jumped 0.23% to the highest close in 48 trading days at 1,788 points,” it said.

Foreign investors returned to selling mode last Thursday to a tune of RM123.7 million after the US proposed a higher tariff of 25% on US$200 billion (RM816 billion) worth of Chinese imports.

“Global funds chipped in RM17 million worth of local stocks last Friday, tracking gains from the technology rally on Wall Street overnight, as well as the Syarikat Pengeluar Air Sungai Selangor Sdn Bhd takeover proposal for RM2.6 billion,” MIDF said.

The research house added that foreign net outflows have been gradually receding in the past three months.

“In May, foreign net selling was at RM5.6 billion, followed by RM4.9 billion in June, while July saw it reduced to RM1.7 billion.

“Among the four Asean markets we monitor, Malaysia has the secondlowest outflows worth US$2.11 billion, or RM8.45 billion, after the Philippines as of last Friday on a year-to-date basis,” it said.

Foreign participation on the local bourse remained solid last week as foreign average daily traded value (ADTV) hit a healthy level of RM1.16 billion, as the ADTV in the retail market dipped below the RM1 billion mark.

Integrated edible oils group IOI Corp Bhd experienced a net inflow of RM7.68 million last week, despite its share price underperformed the market benchmark index.

The second-highest beneficiary of fund inflow was Malaysia Airports Holdings Bhd with RM5.12 million, and Kuala Lumpur Kepong Bhd (KLK) third with RM4.9 million in inflow.

MIDF noted that Tenaga Nasional Bhd saw the largest net money outflow of RM34.2 million last week.

“Its stock price gained 2.12%, outperforming the local benchmark. The advancing share price may indicate a ‘Sell on Strength’ stance among some investors,” MIDF said.

Public Bank Bhd and Dialog Group Bhd came second and third in terms of money outflow with RM19.07 million and RM8.89 million of stock sold respectively during the week under review.

“Public Bank’s share price gained 0.5% for the week, underperforming the market benchmark, while Dialog’s share price advanced 7.64%, substantially outperforming the local benchmark,” the MIDF report revealed.