Fund Flow

Foreign selling of Malaysian equities has tapered although the overhang of foreign portfolio capital which entered the Malaysian equity market in 2013 remains high at net RM5.2bil.

Outflow fell to net RM525mil in the week ended Nov 22 2013, compared with net selling of RM1.39bil in the week ended Nov 15 2013.

In the last seven weeks, RM3.5bil net of foreign portfolio capital had left Malaysian equity. During the six continuous weeks, from July 29 to Aug 6 2013, net outflow triggered by the US Federal Reserve’s tapering decision resulted in a staggering RM8bil of foreign money exiting the market.

In the week ended Nov 22 2013, the net selling by foreign investors as relatively sedate rate. Although foreign funds were net sellers every single day last week, the average was only net RM105mil per day, compared with net RM277mil per day the week before.

Foreign investors were net sellers in 31 out of the last 33 trading days on Bursa.

Since January 2011, the cumulative net inflow of foreign capital into Bursa is estimated to be at net RM20.8bil or net US$7bil (based on the weighted average exchange rate at the point of entry).

Local institutions showed aggressive presence in the market last week. Although they absorbed only net RM411mil, compared with net RM1.2bil the week before, participation rate surged to RM2.3bil, the highest in 12 weeks.

Local retailers were also net buyers, snapping up net RM113mil. The retail segment appears to be going through a buoyant spell now, with active participation, as total trade has exceeded RM1bil for four consecutive weeks now.