FOREIGN investors have turned to net buyers on Bursa Malaysia at a rate of RM570.9 million after net selling for the past 12 consecutive weeks.

Nevertheless, on a year-to-date (YTD) basis, foreigners have been net sellers of domestic equities for 21 out of 28 weeks, with a total net outflow of RM3.88 billion, according to a fund flow report by MIDF Amanah Investment Bank Bhd (MIDF Research).

In a note this morning, it said foreign investors’ interest began on July 12, with a net inflow of RM84.2 million, coinciding with the release of positive economic data, including a 6.6% year-on-year (YoY) growth in monthly sales value for Malaysia’s wholesale and retail trade sector.

Additionally, the country’s manufacturing sector saw an increase in sales value to RM146.8 billion, up 3.3% YoY, in May.

Local institutional investors turned to net sellers of domestic equities after net buying for the past 12 consecutive weeks, according to the report. It was the same with local retailers.

In a separate report, BIMB Securities Sdn Bhd noted that FTSE Bursa Malaysia KLCI (FBM KLCI) produced one of its best rebounds in quite sometime last week thanks to the positive development in US amid its June Consumer Price Index (CPI) that reduced sharply to 3%, slightly better than consensus of 3.1% but markedly better than May’s of 4% and the last one-year peak of 9.1% (June 2022).

More importantly, it said it is just a few tads above US Federal Open Market Committee (FOMC) inflation target of circa 2%, suggesting that the US central bank could be near the peak of interest rate upcycle.

The turnaround by FBM KLCI was expected amid its form that was trampled by multitude of forces, US aggressive interest rate increases and US prevailing inflationary risks notwithstanding. It was a quality rise across all bellwether indexes including FBM70 (+2.8%; week-on-week [WoW]), FBM EMAS (+2.6%), FBM EMAS Shariah (+2.5%) and FBM KLCI (+2.5%), it said.

On the question if the momentum could sustain, the research house said it thinks it will sustain amid investors that could have already priced-in the prospect of another round of Federal Financial Report (FFR) tightening. – TMR / pic TMR File