FOREIGN buying of equities traded on Bursa Malaysia increased 10-fold in the week ended October 4 from the week earlier, providing the clearest signal yet that Bursa Malaysia's bull run is far from over.
For the week ended October 4, foreigners bought RM328.8 million net of local stocks in the open market from RM36.5 million worth of net buying in the week before.
MIDF Investment Research said foreign buying on Bursa Malaysia had bucked regional trend and foreign funds bought on every day last week except for Thursday.
"Buying was especially strong on Monday, when a net RM251 million was mopped up," said the investment research house.
The surplus last week increased the overhang of foreign portfolio capital, which entered the Malaysian equity market this year to net RM8.71 billion, or net US$3.05 billion (based on weighted average exchange rates at the point of entry).
"For the money which had flowed in since January 2011, we estimate the cumulative overhang to remain at net RM24.3 billion or net US$8.1 billion," MIDF said.
The research house said foreign participation stayed below the RM1 billion mark for the second week running.
"Participation rate (average daily gross purchase and sale) was only RM838 million in the past five weeks," it said.
MIDF said local institutions, meanwhile, took the opportunity to reduce their equity exposure further.
"Net sales by local funds amounted to net RM221.3 million, compared with RM132.8 million the week before," it said, adding that the participation rate is tapering, although remained elevated at RM1.57 billion.
The investment research house also said that retailers appear to be jittery over events in the United States, opting to offload net RM107.5 million after nibbling in the market the week before.
"Participation rate fell to below RM1 billion," it said.