TRACKING MONEY FLOW - MALAYSIA

In tandem with regional development, foreign investors sold Malaysian equity last week, reversing the purchases made the week before. However, the amount sold of RM613.7m net was lower than the average amount of RM726m offl oaded per week during the 20 successive weeks of attrition in May to September last year

•  Foreign investors sold Malaysian equity last week, reversing the purchases made the week before. It was in line with regional trend but the attrition was not as intense as that seen during many weeks in 2015.
•  In total, foreign funds sold equities listed on Bursa amounted to RM613.7m net, or equivalent to USD140.2m last week (see chart). This is estimated based on net transactions in the open market (i.e excluding off market deals).

•  The selling was not outright last week. Foreign funds were actually net buyers on Wednesday although the amount was marginal.

•  Most of the selling was on Monday and Thursday, which were the days when the market in China collapsed. On Monday, the net amount sold was RM130m, reversing six days of buying. On Thursday, the amount surged to RM295.2m, the highest since 13 November last year. The selling continued on Friday although the market generally rebounded. We note that on Friday, foreign investors were also net sellers in Seoul, Taipei, Jakarta, Bangkok and Manila.

BURSA MALAYSIA: WEEKLY MARKET PARTICIPATION (RM’m)

• Foreign participation rose last week but the amount remained in the moderate bracket at RM910m. We believe many foreign players were still away from Bursa and are only gradually returning.
•  Rather striking from the statistics last week is the heavy local participation vis-a-vis that of foreigners. On Thursday in particular, the reaction to China’s second market meltdown during the week emanated mainly from local investors. Participation rate of local institutional funds hit RM2.5b on the day.More strikingly was the participation rate of retail investors which hit RM1.1b, which is only the 19th time that the fi gure exceeded the RM1b mark since 1 January 2015.
•  For the week, local players were heavy supporters of the market with retailers and local institutions mopping up RM53.8m and RM559.9m respectively.

by MIDF Research 11/01/16