Published: Wednesday February 13, 2013 MYT 10:43:00 AM

Foreign funds bought net RM385mil Malaysian equities in week ended Feb 8

KUALA LUMPUR: Foreign investors continued to buy Malaysian equities even ahead of the extended weekend on Feb 8 due to the Chinese New Year holidays while local retail investors continued to sell, according to data compiled by MIDF Investment Research.

"Until last week, foreign investors had been net buyers of Malaysia equity for nine weeks in a row. On a net basis, foreign investors bought net RM386.8mil in the open market, compared with net RM458.5mil the week before, which was a three-day trading week," it said on Wednesday.

MIDF Research said foreign funds were heavy buyers on Monday and Tuesday. However they turned skittish on Wednesday-Thursday, and were net sellers, coinciding with the sharp decline in the FBM KLCI, when it fell below 1,600 in early trade on Thursday. The research house said foreign investors were back buying on Friday.

So far this year, foreign investors already bought net RM2.93bil net of Malaysian equities compared with RM13.7bil in 2012.

The research house said amidst the buying, it noted foreign participation rate fell ahead of the Chinese New Year holidays.

It noted that participation rate, which comprises of average daily gross purchase and sale, fell to RM1.0bil, from the RM1.25bil in the prior week prior.

While foreign funds continued to pick up Malaysian equities, local retail investors remained aggressive sellers, selling net RM449mil, which was the highest since August 2011.

"Local retailers had been net sellers in the open market for 10 consecutive weeks until last week. As we do not expect any turnaround in the state of bearishness soon, we do not foresee a post- Chinese New Year rally to be on the horizon," it said.

MIDF Research said retail participation rate continued to be moderate, with gross trade averaging RM537mil, the lowest in five weeks.

"Local institutions supported the market when it came under heavy selling on Wednesday-Thursday. Local funds bought RM62.2mil net last week. Participation rate remained elevated, but decelerated for the second week running to RM1.68bil compared with RM1.86bil the week before," it said.

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