Stock Trading Counter: Net inflow of foreign funds into Bursa reduced to RM100m in 2016

Net foreign inflow of foreign funds into Malaysian equities so far in 2016 has been reduced to only RM100.6mil as at June 17, says MIDF Equities Research, which is the lowest since Feb 26.

Foreign selling in Bursa extended for the eighth consecutive week. The net amount offloaded by foreign investors increased substantially to –RM1.012bil last week from –RM169.9mil the week prior.

“It was the third largest selling since Sept 25, 2015. The estimates are based on transactions in the open market which excluded off market deals,” said the research house.

Foreigners were net sellers on all five trading days last week. Selling momentum was strong at RM180m per day on Monday through Thursday.

“Foreigners started the week with heavy attrition of –RM227.4mil and –RM284.5mil on Monday and Tuesday, respectively. Selling pressure eased slightly to –RM184mil on Wednesday. However, the pace picked up again on Thursday at –RM273mil. Foreigners eventually closed the week with a milder attrition of –RM43.3mil.

“Last week’s foreign withdrawal further reduced the cumulative net foreign inflow thus far this year into share listed on Bursa to an estimated +RM100.6mil, down significantly from prior week +RM1.11bil. It was the lowest figure since Feb 26 this year.

“The figure has been on a declining trend for eight successive weeks. In retrospect, foreigners had offloaded -RM19.5bil and -RM6.9bil in 2015 and 2014 respectively,” it pointed out.

MIDF Research said foreign participation remained moderate last week. It was little changed at RM812.3mil, up +0.3% from prior week.

Excluding off the outlier data point two weeks ago due to foreigners’ mid-year portfolio rebalancing, their participation rate has remained subdued at less than RM1bil for three consecutive weeks.

“Local institution provided support to the market by loading up RM799.1mil on Bursa last week. Despite that, its participation rate declined further to RM1.6bil from prior week’s RM1.9bil. It was the second lowest figure in one year time.

Retail buyers turned active players last week by loading up RM213.1mil. It was their biggest buying since the end of April this year. However, their participation rate has edged down to RM487.8mil,” it said.

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