Big Inflow in June

Foreign funds were net buyers of Malaysian equities in June.

Statistics from Emerging Portfolio Fund Research (EPFR) revealed a decent net inflow of US$169mil, which reduced the year to date net selling by more than half.

This is the first time since Nov 2009 that foreigners are net buyers. The net inflow in June is the highest since October 2009 and wipes out the total net outflow for the first quarter of 2010.

CIMB Research said that net value rose 6% to US$5.72bil as Malaysia had a good month in June, during which the KLCI gained 2.3%. The country’s US$169mil net inflow in June was similar to those seen by its regional peers such as Thailand (US$202mil), Indonesia (US$162mil) and Singapore (US$87mil). Only Hong Kong suffered an outflow to the tune of US$277mil. In the region, Malaysia has still been sold down the most in the past 2 years.

Since the 8 Mar 08 general elections, which triggered a big selloff by foreign funds, foreign funds have sold down 37% of their holdings compared with up to only 22% for other regional markets. Malaysia’s weighting in EM Asia has shrunk more than any other country in the region, from nearly 4% before Feb 08 to 2.4%