- Location and Source: The information comes from Petaluma, Malaysia, and was reported by MIDF Research. MIDF Research is likely a financial research firm or institution that tracks and analyzes market trends, including investments in equities (stocks).
- Foreign Investment in Malaysian Equity: The report highlights a significant decline in foreign investment in Malaysian equities. Specifically, there was a 51% decrease in the value of foreign investments in one week, dropping from RM267.7 million to RM131.8 million. This suggests a substantial reduction in the amount of money foreign investors were putting into Malaysian stocks compared to the previous week.
- Net Buyers on Bursa Malaysia: Despite the decrease in investment volume, foreign investors remained net buyers on Bursa Malaysia for the second week in a row. Being a “net buyer” means that the overall activity of these investors was more focused on purchasing stocks than selling them. The term “Bursa Malaysia” refers to the Malaysian stock exchange, the primary securities exchange in Malaysia where stocks are bought and sold.
- Net Foreign Inflow: The report mentions a “net foreign inflow” of RM131.8 million. This indicates the net amount of foreign capital entering the Malaysian stock market. Despite the decrease in the total investment compared to the previous week, this inflow value signifies that foreign investors were still injecting more money into the market than they were withdrawing. The net inflow is equal to the amount by which purchases of Malaysian equities by foreign investors exceeded their sales.
This information is crucial for understanding the dynamics of Malaysia’s stock market, especially in terms of foreign participation. A decline in foreign investment can have various implications, such as reduced liquidity or potential concerns about the market’s attractiveness or stability. However, the fact that foreign investors remained net buyers suggests continued confidence in the Malaysian market despite the weekly fluctuation.
Weekly Fund Flow Analysis
In its Fund Flow Report for the week ending February 2, 2024, MIDF Research provided a detailed analysis of foreign investment activities in the Malaysian equity market. The report highlighted the following key points:
- Net Foreign Inflows: Foreign investors were net buyers on Wednesday and Friday, amounting to RM166 million and RM86.6 million, respectively. However, they net sold on Monday and Tuesday, posting RM96.2 million and RM24.6 million, respectively.
- Shortened Trading Week: It was noted that the trading week was shorter due to the Federal Territory Day on Thursday, impacting market activities.
MIDF Research also examined the sectors that attracted the highest net foreign inflows and outflows:
Top Three Sectors with Highest Net Foreign Inflows:
- Telecommunications and Media: RM85.5 million
- Industrial Products and Services: RM37.5 million
- Plantation: RM23.2 million
Top Three Sectors with Highest Net Foreign Outflows:
- Utilities: RM84.8 million
- Property: RM49.2 million
- Real Estate Investment Trusts: RM16 million
The report provided insights into the activity of local institutions:
- Net Selling: Local institutions maintained their stance as net sellers for the second straight week, with a total net selling of RM141.3 million. The majority of the net selling occurred on Wednesday and Friday at RM175.1 million and RM116.8 million, respectively.
- Net Buying: However, they net bought RM97.3 million on Monday and RM53.3 million on Tuesday.
Retail Investor Trends
MIDF Research also examined the behavior of local retailers:
- Net Buying: Local retailers recorded their first weekly net buy this year at RM9.5 million after net selling for four consecutive weeks. They net bought RM9.1 million on Wednesday and RM30.2 million on Friday, following net selling of RM1.1 million on Monday and RM28.8 million on Tuesday.
- Trading Volume: In terms of participation, there was an increase in the average daily trading volume among foreign investors by 4.5%. However, local retailers and local institutions saw a decline of 17.5% and 15.5%, respectively.
The report by MIDF Research provides valuable insights into the dynamics of foreign and domestic investment in the Malaysian equity market for the specified week. It highlights the impact of market events and trends in various sectors, contributing to a comprehensive understanding of the market’s performance during the period.
Featured Image courtesy of DALL-E by ChatGPT