Malaysia Market – No “January Effect”
• After 7 trading days in 2014, it is clear that foreign investors’ appetite for Malaysian equity is currently very low. Foreign funds sold -RM686.4m net of Malaysian stocks in the open market (i.e excluding off-market transactions) last week, the highest in two months.
• In the last 14 weeks, a total of -RM6.5b of foreign money had exited Malaysian equity, or an average of -RM464m a week.
• Foreign funds were net sellers every single trading day last week. Foreign selling was aggressive on Thursday and Friday , offl oading -RM211.2m and -RM327.2m respectively. The selldown on Friday was the highest in a day since November 13, when -RM427m left amid trepidation over the U.S
• However, we note that although foreign participation increased last week, the level of activity did not refl ect an “exodus”. Participation rate (average daily gross purchase and sale) rose to RM893m, still less than the RM1b mark, and about RM100m lower compared with the daily average of RM991m in 2013.
• Local retailers are returning to the market, and were net buyers for the second week running. We note however that retailers sold on Friday, probably on profi t taking ahead of the holidays this week.
Participation rate surged last week to RM957m, from RM688m the week before.
• Local institutions continued to absorb the selling by foreign funds. Local funds bought +RM584.7m
net last week on a signifi cantly active participation. Participation rate surged past the RM2b mark at RM2.2b. It was only the fourth time it exceeded the mark since September last year.