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Wednesday, 18 January 2017

(The Star) MIDF: Foreign funds return, may buy heavyweights

PETALING JAYA: Foreign funds have been making a comeback to Bursa Malaysia so far this year and could benefit some familiar heavyweight counters, according to MIDF Research.
“While it may still be too early to be too optimistic, if the momentum of foreign net inflows persists, buying interest is likely to return to the familiar heavyweight names that came down in tandem with the general decline in foreign shareholdings during the past years,” it said.
The research house added that it maintained its FBM KLCI 2017 year-end target of 1,830 points.
MIDF believes heavyweights such as Digi.Com BhdAxiata Group BhdSime Darby BhdCIMB Group Holdings Bhd, Malayan Banking BhdPetronas Dagangan BhdSapuraKencana Petroleum Bhd and IHH Healthcare Bhd are among stocks that may attract higher foreign shareholdings in 2017.
According to MIDF, foreign investors have been making a comeback and were net buyers in five out of the first nine trading days in 2017.
Indeed, the aggregate net inflow of foreign funds in the first nine days of this year amounting to RM485mil had been the highest since 2013, which corresponds to the year of the last general election.
“Most notably, foreign investors had been net purchasers in the last three trading days (Wednesday, Thursday, and Friday).
The three-day haul of RM468mil is the highest since September last year. The sequential-day inflow is a positive sign that confidence is returning,” it said.
“It is no coincidence that the foreign funds are returning in what is widely expected to be an election year.
“Markets in this region tend to perform well when the electorates go to the polls and signs are abound that the incumbent Government will call for an election this year.

“Foreign funds are therefore expected to take tactical positions in local stocks ahead of the polling date,” MIDF said.