Foreign buying on Bursa slows to RM146.8m last week
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Foreign funds snapped up RM146.8 million net of local equities last week during the holiday-shortened week. “Foreign funds resumed their entry into stocks listed on Bursa for the fourth consecutive week albeit at a slower pace compared to the preceding week,“ MIDF Research said in its weekly fund flow report.
It said last Monday saw a moderate net inflow of foreign funds worth RM37.3 million, extending the daily buying streak to nine days. However, this foreign buying spree came to an end on the next day as international funds sold RM12.8 million net, coinciding with the local bourse’s 0.4% slide to settle at 1,690 points.
Risk appetite was weak on Tuesday following the overnight 2.8% slump in Brent crude oil price combined with the anticipation ahead of the Sino-US trade negotiations.
Notwithstanding this, offshore investors returned to Bursa on Wednesday at a tune of RM65.1 million net, the highest foreign net inflow during the week.
The catalyst responsible for the boost of foreign net inflows on that day was 0.4% increase in Brent crude oil price as US President Donald Trump’s administration slaps sanctions on Venezuela’s state-owned oil company while Saudi Arabia had a deeper output cuts in January than initially pledged.
The momentum of foreign net inflows continued on the last trading day of the week as foreign investors bought RM57.2 million net.
“We opine that the sentiment was partially supported by the Malaysia’s exports in 2018 which grew by 6.7% to reach almost RM1 trillion. Meanwhile, the FBM KLCI was little changed, declining by less than 1% on Thursday ahead of the long weekend and festive season.”
The month of January 2019 saw a foreign net inflow of RM1.03 billion or US$249.3 million, the first monthly net inflow since September last year.
“In comparison with the three other Asean markets we monitor, Malaysia has the second lowest foreign net inflow while Indonesia leads,“ said MIDF.
Foreign investors were the only group which saw a weekly increase in average daily traded value, jumping by 21.0% to remain above RM1 billion for the second week running.
Questions & Answers
Q.Did foreign funds maintain a consistent buying streak throughout last week on Bursa?
Did foreign funds maintain a consistent buying streak throughout last week on Bursa?
No, while foreign funds extended their daily buying streak to nine days on Monday, this ended on Tuesday with net selling. They returned to net buying on Wednesday and the last trading day of the week.
Q.What factors influenced foreign fund activity on Bursa last week?
What factors influenced foreign fund activity on Bursa last week?
A drop in Brent crude oil prices and anticipation of Sino-US trade talks weakened risk appetite on Tuesday. An increase in Brent crude price, US sanctions on Venezuela, and Saudi output cuts boosted inflows on Wednesday.
Q.How did Malaysia's foreign net inflow compare to other ASEAN markets monitored by MIDF?
How did Malaysia's foreign net inflow compare to other ASEAN markets monitored by MIDF?
Malaysia had the second lowest foreign net inflow compared to the three other ASEAN markets monitored by MIDF Research last week. Indonesia led these comparative markets in foreign net inflow.
Q.What was the total foreign net inflow into Bursa for the month of January 2019?
What was the total foreign net inflow into Bursa for the month of January 2019?
The total foreign net inflow into Bursa for January 2019 was RM1.03 billion, which is equivalent to US$249.3 million. This marked the first monthly net inflow since September of the previous year.
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