Strong buying by local institutions amid elevated dumping by foreign funds

FOREIGN investors remained net sellers on Bursa Malaysia for the third consecutive week with an outflow of -RM301.2 mil which was 3.7 times higher than -RM81.9 mil the previous week.

Last week was a shortened trading week of four days due to newly minted Prime Minister Datuk Seri Anwar Ibrahim declaring Monday (Nov 28) as a public holiday.

“They took profit after a meteoric rise of the barometer FBM KLCI in the week prior when Anwar was named PM, net selling every day of the week except on Thursday (Dec 1) when they net bought RM77.7 mil,” observed MIDF Research in its weekly fund flow report.

“The heaviest net selling was on Friday (Dec 2) at -RM292.8 mil as uncertainty loomed over the delay in the Cabinet line-up announcement which was eventually revealed on the same night.”

Foreign investors also net sold -RM10.7 mil on Tuesday (Nov 29) and -RM75.4 mil on Wednesday (Nov 30).

The top three sectors which saw net inflows by foreign investors last week were technology at RM72.8 mil, utilities (RM40.3 mil) and construction (RM39.4 mil).

Meanwhile, the three sectors with net outflows were financial services at -RM153.5 mil, healthcare (-RM128.1 mil) and industrial products & services (-RM101.5 mil).

While there was dumping by foreign funds, local institutions came on strong to capitalise on buying opportunity amid a more stabilised political arena with the formation of a unity government.

They net bought RM431.2 mil last week, the highest since the week ended Sep 30 at RM669.2 mil. They started the week by net selling -RM10.7 mil before turning net buyers for the remaining days, recording the strongest net buy on Friday (Dec 2) at RM301.5 mil.

However, local retailers turned net sellers for the week, reversing their net buying trend after two weeks with a net selling of -RM130.1 mil.

They net bought RM21.4 mil on Tuesday (Nov 29) before turning net sellers from Wednesday (Nov 30) to Friday (Dec 2). Their highest net selling was recorded on Thursday (Dec 1) at -RM128.4 mil.

International investors have been net buyers for 26 out of the 48 weeks of 2022 with a total net inflow of RM5.53 bil. Local institutions were net sellers for 32 out of 48 weeks with a total net outflow of –RM7.57 bil.

Local retailers have been net buyers for 30 out of 48 weeks. Year-to-date, they have been net buyers at RM2.04 bil.

In terms of participation, there was an increase in average daily trading volume (ADTV) among foreign investors and local institutions by +61.6% and +7.6% respectively while retailers saw a decline of -10.5%.

In comparison with another three Southeast Asian markets tracked by MIDF Research last week, Thailand was the only market which posted a net inflow with US$124.74 mil while Malaysia posted the highest outflow at -US$68.42 mil followed by Indonesia (-US$51.21 mil) and the Philippines (-US$29.04 mil).

The top three stocks with the highest net money inflow last week were Malayan Banking Bhd (Maybank) (RM10.13 mil), Tenaga Nasional Bhd (RM3.83 mil) and IHH Healthcare Bhd (RM3.37 mil). – Dec 5, 2022

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