THE conditional movement control order (CMCO) has again been a catalyst for the robust trading activity in the local bourse, culminating in retail investors excelling in terms of participation on a week-on-week (wow) basis.
According to CGS-CIMB Research, last week saw retail investors taking the biggest slice of total trading value at 34.7%, followed by institutional investors (24.9%), proprietary trade (23.8%) and nominees (16.6%).
In this regard, the research house said average daily turnover volume and value rose 11% and 29% wow respectively to 6.9 billion units and RM4.8 bil last week following implementation of the CMCO in Selangor, Kuala Lumpur and Putrajaya from Oct 14 to 27 to contain a spike in COVID-19 cases.
“Out of the total institutional trade of RM11.7 bil last week, 51.3% were domestic while 48.7% were foreign investors,” noted CGS-CIMB in its inaugural fund flow report.
The findings in the fund flow report runs parallel with FocusM’s observation that trading activities in the local bourse seems to have a positive correlation with the CMCO.
Aside from a spike in trading activities in tandem with the CMCO, CGS-CIMB also made four other observation on the recent fund flow trends:
- Foreign investors continued to exit on political uncertainty: Foreign selling picked up pace wow, possibly due to concerns relating to the ongoing power struggle in Malaysia and potential earnings disappointment due to CMCO.
- Institutional investors keen on beneficiaries of COVID-19 and FBM KLCI index review: Top Glove Corp Bhd, Supermax Corp Bhd and Hartalega Holdings Bhd were among the top buy flows for institutional investors last week. This could in part be due to positioning by investors ahead of the possible inclusion of Supermax in the FBM KLCI in the upcoming review in December.
- Retail investors prefer COVID-19 recovery plays: Genting Bhd, Tenaga Nasional Bhd and CIMB Group Holdings Bhd were the top recipients of retail investors’ net buy flows last week. It would appear that retail investors prefer laggards and value plays in the market.
- Foreign institutional investors keen on stocks with potential news flow: PPB Group and LC Titan were the top two recipients of foreign investor net buy flows. Genting, Hartalega and Tenaga Nasional were the top sell flows for foreign investors. – Oct 22, 2020
