Foreign fund outflow from Malaysia above RM11b: MIDF Research
(The Star) – MIDF Equities Research estimates that cumulative net foreign outflow from Malaysian equities rose to RM11.7bil at end July, significantly surpassing the RM6.9b outflow for the entire 2014.
In its report issued on Monday, it said foreign money outflow from Bursa-listed companies continued unabated last week.
“Foreign investors have now been net sellers on Bursa for 14 consecutive weeks, the longest stretch of back-to-back weekly selldown since the 2008 Financial Crisis,” it said.
MIDF Research pointed out that in the week ended July 31, investors classified as “foreign” sold equity listed in the open market on Bursa (that is excluding off-market deals) amounted to RM845mil on a net basis, edging up from RM830.1mil the week before.
Foreign selling was heavy on Monday-Wednesday, with daily net sale exceeding RM200mil, but less than RM300m. That made it 26 times that the daily threshold had been exceeded this year. For the entire 2014, there were 23 days during which net sale surpassed RM200mil.
“We note, however, that foreign investors were net buyers on Friday, mopping up RM132mil net, the first purchase in 12 trading days. However, it is too early to assume that the trend in money flow is reversing.
“For July, the cumulative net foreign outflow was RM2.81b, compared with the RM3.2b deficit in June. • For 2015, last week’s selldown increased the cumulative net foreign outfl ow to RM11.7bil,significantly surpassing the RM6.9b outflow for the entire 2014,” it explained.
Meanwhile, local institutions mopped up RM938.4mil in the open market last week, but participation rate remained below RM2bil at RM1.96bil.
Retailers took profit on small-cap stocks last week, offloading RM93.4m net, on active participation.
MIDF Research said Malayan Banking recorded the highest net money inflow of RM15.97mil last week. However, its share price slightly underperformed the broader market with a -0.33% weekly decline.
In comparison, the FBM KLCI was up by 0.14% during the review week. But it noted that PT BII, Maybank’s Indonesia subsidiary, recently announced 13.9%on-year higher net profit for
1H15.
“It must also be highlighted that net money inflow amidst retreating share price indicates buy on weakness (BOW) stance among some investors,” it said.
Fraser & Neave came in second with RM13.24mil net infl ow and its share price outperformed the market benchmark with a 2.02% week-on-week gain.
MIDF Research said DiGi.com recorded the third highest net money inflow of RM10.80mil and its share price slightly outperformed the FBM KLCI with a 0.37% weekly rise. The company is believed to be assessing the merits of business-trust structure in view of its rising cash pile.
However, it said Public Bank saw the largest net money outflow of –RM11.74mil during the review week. Accordingly, its stock price underperformed albeit slightly as it ended the week unchanged against a 0.14% rise in the FBM KLCI. This was despite the company recently reporting a 13.29% higher profit to RM1.2bil on the back of a 16.72% jump in revenue to RM4.74bil in 2Q15.
Top Glove came in second last week with a net outflow of –RM6.24mil and its share price underperformed the market benchmark with a -0.52% weekly loss.
MIDF Research said SapuraKencana registered the third largest net money outflow at –RM3.48mil in the review week. Nonetheless, its share price outperformed the broader market with a 2.51% weekly rise.
It pointed out net money outflow amidst rising share price may indicate sell on strength (SOS) stance among some investors.
