Foreign funds net buyers in week ended Jan 6

In a filing with Bursa Malaysia yesterday, Sime Darby said SDE had on Feb 5 received a notice from the Dubai International Arbitration Centre (DIAC) that EMAS had submitted a request for arbitration against SDE which was filed on Jan 24, 2016. The amount that EMAS is seeking from the arbitration proceedings is AED41.04mil (about RM46.37mil).

KUALA LUMPUR: Foreign funds were net buyers on Bursa Malaysia in the week ended Jan 6 at RM101.8mil with Sime Darby and AirAsia recording strong net money inflow, says MIDF Research.

It said on Monday the Malaysian equity market welcomed the new year on a positive note. In the first week of 2017 as the foreign fund net buying of RM101.8mil was in contrast with the net selling of RM31.2mil in the prior week.

“This could be attributable to the general inflows into Asia last week and supported by Malaysia’s encouraging trade numbers which saw an uptick in exports by +7.8% on-year in November,” it said.

MIDF Research said on net daily basis, foreign investors were seen buying on Tuesday and Friday, with the bulk on the latter day of RM136.4mil. Attritions on Wednesday and Thursday were identical at -RM28.2mil.

Retail investors gross participation rate continued to expand for its second week in a row to RM596.1mil from RM429.6mil in the prior week. 

MIDF Research said this was despite the buying on dips conviction which has turned negative for the second week to -RM123.3mil compared to the prior week of -RM68.8mil.

“The institutional investors gross participation rate improved for the second week in a row to RM2.06bil from RM1.920bil in the prior week.

United Plantations registered the highest net money inflow of RM8.10mil last week. However, its share price underperformed the broader market in spite of a 1.71% gain as the FBM KLCI advanced by a bigger 2.06% during the week under review.

Sime Darby recorded the second highest net money inflow of RM3.36mil. Accordingly, its share price outperformed against the market benchmark with a hefty 5.56% gain during the review week.

In related news, Sime Darby Plantation has not dismissed the possibility of downsizing as it looks at ways to optimize its current operations.

Airasia saw the third highest net money inflow of RM2.70m but its share price underperformed with a -3.06% loss during the review week arguably in reaction to a rating cut (from hold to sell) by a major foreign bank alluding to weaker ringgit, higher jet fuel prices and pressure on yields.

Nonetheless, net money inflow amidst retreating share price for the low-cost carrier may indicate a buy on weakness (BOW) stance among some investors.

Public Bank saw the largest net money outflow of –RM21.60mil last week. Accordingly, its stock price performance lagged the market benchmark with a 1.42% gain vis-à-vis the FBM KLCI which advanced by a larger 2.06% during the review week. 

It is notable that net money outfl ow amidst advancing share price indicates a sell on strength (SOS) stance among some investors.

Malayan Banking recorded the second largest net money outfl ow –RM19.07mil during the week under review and its share price underperformed the market benchmark with a mere 0.61% weekly gain which may attract a sell-on-strength stance among some investors.