KUALA LUMPUR – Total monthly foreign net inflow reached RM1.1 billion in August, the first monthly foreign net inflow after 25 consecutive months of foreign net outflow, said Bank Islam Malaysia Bhd economist Adam Mohamed Rahim.
He said foreign investors ended August with a bang, acquiring RM513.6 million net of local equities.
“This is the largest daily foreign net inflow recorded so far in 2021,” he told Bernama, adding that last week, foreign investors acquired RM786.4 million net of local equities compared with the RM964.2 million net recorded in the previous week.
As markets reopened on Wednesday after the Merdeka Day celebration on Tuesday, he said, September began on a positive note, with international investors buying RM116.7 million net of local equities.
This is despite China’s factory activity growing at a slower pace last month from July.
The weakness in China’s factory activity somewhat raised hopes of an easing in policy, pushing the CSI 300 index higher by 1.3% on Wednesday.
Perhaps, said Adam, the gains seen in China’s equity market are spilling over to other parts of Asia, including Malaysia.
The momentum of foreign net buying slowed down on Thursday, reaching only RM6.8 million net as some investors began to take profit following the 7.1% monthly gain in the FTSE Bursa Malaysia KLCI (FBM KLCI) last month.
“Nevertheless, the pace of foreign net buying spiked to RM149.3 million net on Friday as some of the positive vibes were sparked by the government’s decision on the activation of the Langkawi travel bubble from September 16, 2021, pushing the Bursa Malaysia Transportation and Logistics Index higher by 1.5%, the largest gainer among sectoral indices on that day.”
On a year-to-date basis, foreign net selling on the local bourse stands at RM4.2 billion net.
Separately, MIDF Research in a note said FBM KLCI decreased 0.06% last week to settle at 1,589.19 points, while the ringgit saw a weekly appreciation by 1.07% against the United States dollar to close at 4.1460 to the greenback last Friday. – Bernama, September 6, 2021
