KUALA LUMPUR – Foreign investors acquired RM117.5 million net of local equities during the first week of February 2021 compared with the RM535.5 million sold in the preceding week.
Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said this was the second weekly foreign net inflow seen on the local bourse so far this year.
“It was a great start to the week for the Bursa as international investors piled into local equities to the tune of RM179.7 million net on Tuesday,” he said.
The local market was closed last Monday to mark Federal Territory Day.
Adam said share prices of rubber glove makers such as Top Glove jumped 4.6% as retail investors continued to accumulate the stock amidst the social media-driven effort to squeeze short-sellers of the stock.
On the external front, he said positivity in markets emerged on Tuesday as United States President Joe Biden and congressional Democrats signalled that they were intent on the US$1.9 trillion (RM7.69 trillion) pandemic relief.
The move could potentially be taken without Republican support even after the White House meeting with Republican senators, which both sides had described as “productive”.
Meanwhile, in its fund flow report, MIDF Research noted that when the market resumed on Tuesday, foreign investors bought RM179.11 million net of local equities.
Conversely, retailers and local institutions were net sellers to the tune of RM6.01 million and RM173.10 million, respectively.
“Subsequent continuous selling of foreign investors was not able to negate Tuesday’s inflow. The largest foreign outflow was recorded on Friday at RM38.78 million and the smallest outflow was on Wednesday at only RM4.90 million,” it said.
Meanwhile, Adam noted that rubber glove makers’ shares on the FBM KLCI were in the red on Friday, indicating that retail investors may not have the financial strength to support the heavy buying activity for the sector.
“Foreign investors might have taken cue of the slower buying activity by the local retail investors and remain on the sidelines.
“On a year-to-date (YTD) basis, international investors have sold RM717.1 million net of local equities from Bursa,” he said.
In comparison with Southeast Asian peers, namely Thailand, Indonesia, and the Philippines, Malaysia has the smallest YTD foreign net inflow while Thailand has the largest YTD foreign net outflow of US$664.0 million, he noted.
“Meanwhile, Indonesia is the only country that recorded a YTD foreign net inflow of US$1.1 billion net among the Southeast Asian countries we monitor,” Adam added.
In terms of participation, the retail investors recorded a weekly decrease of 14.55% in average daily trade value, while the foreign investors and local institutions experienced declines in ADTV of 9.68% and 19.85%, respectively. – Bernama, February 8, 2021
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