Foreign funds flowing into Bursa, making it regional favourite

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PETALING JAYA: Malaysia can claim to be the most favoured emerging market in Southeast Asia in 2017 among global investors, based on foreign liquidity flow into the stock exchange, says MIDF Research.

Foreign investors, it said, purchased RM1.14 billion net in the open market (excluding off market deals) last week. And for the second week running, the amount exceeded RM1 billion.

Foreign liquidity flowing into the Bursa, it said in its fund flow report yesterday, remained elevated for the third week running.

Foreign investors have so far this year pumped close to RM6 billion into the local stock market, reversing the RM3 billion outflow last year.

“Relatively low foreign ownership of stocks, strong corporate fundamentals and an unjustifiably weak currency makes Malaysian equity hard to ignore,” MIDF Research said.

The Sun daily quoted MIDF Research as saying foreign investors had now been net buyers on the Bursa for eight consecutive weeks.

As of Friday, the report said, foreign net buying had extended for 15 trading days, the longest since March 2016.

For the month of March, cumulative foreign net purchases amounted to RM4.7 billion. This, the report added, was quadruple the cumulative RM956 million inflow in February 2017.

The foreign average daily trade value (ADTV) stood at RM1.05 billion, the third highest this year, MIDF Research said.

“The strong foreign buying momentum continues to enable local investors to lighten their position. Local institutions offloaded RM1.09 billion net last week and have disposed RM4.95 billion net year-to-date,” it said.

The Sun quoted it as saying the retail investor market remained vibrant, too, despite ADTV declining by 16% to RM1.06 billion compared with the previous week, marking the fourth week in a row it had exceeded RM1 billion.

However, MIDF Research noted, retail investors were on “take-profit” mode and selling for six weeks in a row.