||Asean Affairs 11 June 2013
Foreign funds net sellers of RM523.9m of Malaysian equities
KUALA LUMPUR: Foreign selling on Bursa Malaysia extended into the week ended June 7, which was the second consecutive week, where they were net sellers of RM523.90mil in Malaysian equities, says MIDF Equities Research.
It said on Monday however, the intensity of the selldown reduced as the amount was less than the net selling of RM629.5mil in the week ended May 31.
MIDF Research pointed out this was in contrast to that unravelling in Thailand and Indonesia, where selling intensified last week.
"Surprisingly, foreign investors did not sell every day in the week. They were actually net buyers on Tuesday. By Friday, the amount of net sale had dwindled to only RM27.3mil," it said.
"Even after the liquidation in the last two weeks, the overhang of foreign liquidity remained uncomfortably high. So far this year, foreign investors have bought net RM17.5bil or net US$5.8bil net of Malaysian equity in the open market compared with net RM13.7bil (net US$4.5bil) in 2012," it added.
On the market participation in the week ended June 7, MIDF Research said foreign participation rate (average daily gross purchase and sale) stayed elevated at RM1.1bil. The figure had exceeded RM1bil in the last six weeks.
"The local retail market remained resilient and active despite some nervousness of late. Retail investors actually snapped up shares last week, with net purchase amounted to net RM67.4mil," it said.
MIDF Research said that was the highest since November, on active trading. Participation rate stayed above RM1bil for the fifth week running at RM1.2bil.
"As the correction in the second and third liners were not severe last week, we expect the retail market to stay active. As we had written last week, local retailers have, cumulatively, offloaded net RM5.9bil this year and net RM10.1bil since Jan 2011. Retailers do have cash.
"Local institutional funds supported the market heavily again last week. Local institutional funds bought net RM456.5mil after mopping up net RM633.2mo; the week before," it said.
MIDF Research said the participation rate was at RM2.1bil, the sixth week in a row that the figure had exceeded RM2bil.
The research house said as in the case of local retailers, local funds remained flushed with liquidity, having reduced their equity exposure by net RM11.6bil net on the open market this year and net RM21.1bil since January 2012.