PETALING JAYA: Malaysia saw a net foreign buying of RM10.33 billion (US$2.36 billion) on Bursa Malaysia in 2017, according to MIDF Research.
This offset about 35% of the total outflows from 2014 to 2016. The amount is estimated based on net transactions in the open market excluding off-market deals.
The research house said the US$2.36 billion was the highest among the four Southeast Asia markets tracked by MIDF Research.
This was the first annual net inflow recorded since the election year of 2013 and the biggest since 2012 which experienced an inflow of US$4.75 billion net.
MIDF Research said foreign funds were rather aggressive buyers in 2017 where Bursa recorded a net injection in 35 out of 52 weeks of trading during the year.
“From early February to June 2017, foreign funds were net buyers for 18 straight weeks, the longest buying streak recorded since 2013 which had 21 weeks. The most outstanding day was on March 17, 2017 when foreign investors loaded up RM816.1 million net coinciding with FBM KLCI closing above the 1,740 level for the first time since June 2015, resulting in a monthly inflow of RM4.37 billion net for March 2017 amid election rumours.”
MIDF Research, however, said from August to November 2017, foreigners retreated from Bursa as they dumped RM1.22 billion net during that period due to the escalating tensions in the Korean peninsular.
“Interestingly, the significant progress made for the US tax overhaul plan saw foreign funds making a comeback in December 2017 as they acquired RM959.9 million net.”
MIDF Research foresees inflows would continue in 2018 especially after the 14th general election as investors favour certainty in the market. The research house also noted that other external factors such as foreign investors’ views on external monetary policies could prompt outflow of cheap money used by investors to enter emerging markets.