KUALA LUMPUR – Foreign investors remained net buyers of local equities on Bursa Malaysia in the first two weeks of this month, with inflows totalling RM526.7 million.
“This brings the cumulative year-to-date foreign net outflow to RM1.2 billion,” said Bank Islam Malaysia Bhd economist Adam Mohamed Rahim.
He said foreign investors bought RM240.8 million net of local equities during the second week of March, down from RM285.9 million in the preceding week.
He explained that Bursa Malaysia began last week on the wrong foot as international investors sold RM62.9 million net of local equities on March 8, as inflation worries offset optimism over the passage of a US$1.9 trillion (RM7.8 trillion) stimulus plan in the United States.
Nevertheless, he said, foreign investors returned to the local stock market with RM120.7 million net the next day, buoyed by rubber glove counters, namely Kossan Rubber Industries Bhd and Top Glove Corporation Bhd, which gained by more than 1% for the day.
“The strength in rubber glove counters came about as Top Glove released its latest quarterly results, which saw its revenue for the second quarter ended February 28 grow 12.74% to hit a record RM5.37 billion from RM4.76 billion in the first quarter.
“This despite an 8% decline in volume due to a temporary production halt in its facilities in Klang last November and December.”
On the global front, Adam said the upbeat sentiment in regional Asian markets is due to a retracement in the US bond yields following remarks of central banks across the globe, including the US Federal Reserve, which mentioned that it has the tools to deal with inflation.
He added that offshore investors upped the ante in their buying activity as they mopped up RM186.6 million net of local equities on March 10.
He also said the pace at which foreign investors were buying local equities slowed down to RM72.4 million net last Thursday, adding that the three-day buying streak snapped on Friday as foreign investors withdrew RM76.0 million net of local equities amid continuing profit-taking activity.
“This is because international investors decided to lock in some gains despite receding worries about rising inflation following the bigger-than-expected fall in weekly jobless claims in the US.” – Bernama, March 15, 2021
