Reversal of trend occured with fund flows last week

KUCHING: A reversal of trend occurred last week, the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) observed in a fund flow report, as there was an exodus of foreign funds from stocks listed on Bursa after six straight weeks of buying.

According to MIDF Research, based on preliminary data from Bursa which excluded off market deals, international investors withdrew RM1.75 billion net of local last week, wiping off around 92 per cent of the net inflows worth RM1.92 billion accumulated in the previous three weeks.

“In fact, this was the first weekly attrition in seven weeks and the highest since the August 2013, the year of the 13th General Election,” it said.

MIDF Research noted that foreign funds were net sellers on all five trading days last week.

“Tuesday saw a net outflow of RM868.6 million net, the largest attrition in more than four years, coinciding with FBM KLCI’s biggest single day drop since December 2014 of 2.19 per cent to a 23-trading day low at 1,812 points.

“This came to no surprise as investors fled from equities spooked by the rise in US yields in the week before and following ’s turmoil on Monday.”

The research arm further noted that thereafter, foreign selling levels normalised to levels ranging from RM130 million to RM160 million net on Wednesday and Thursday as investors shrugged off data which showed Malaysia’s exports rose at a much slower pace for the second straight month following overnight gains on Wall Street.

“However, foreign selling rose back to a high level of RM323.3 million net on Friday as Dow Jones declined by more than 1,000 points for the second time in a week.”

MIDF Research highlighted that despite the accelerated momentum of selling activity, foreigners have mopped up RM1.86 billion net during the fi rst 6 weeks of 2018 compared to RM612.8 million net during the same period in 2017.

As for foreign participation, MIDF Research noted that it remained vibrant as the foreign average daily trade value (ADTV) stood at RM1.6 billion marking its sixth week of being above the RM1 billion threshold.

“Meanwhile, the strong foreign selling momentum paved the way for local fund managers to acquire RM1.8 billion net, a level not seen since November 2016.”

Hong Leong Financial Group Bhd registered the highest net money inflow of RM11.62 million last week while Petronas Chemicals Bhd recorded the second highest net money inflow of RM9.31 million.

Meanwhile, IHH Healthcare Bhd saw the third highest net money inflow of RM8.84 million.

On outflows, Bhd saw the largest net money outflow of RM25.58 million last week.

Dutch Lady Milk Industries Bhd recorded the second largest net money outfl ow RM17.66 million during the week under review while Amertron Bhd registered the third largest net money outflow at RM8.08 million.

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Source: Borneo Post Online

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