Inve$t | Market Sentiments
26 August 2022
According to the Department of Statistics Malaysia (DoSM), Malaysia’s leading index (LI) rebounded 5.3 per cent year-on-year to 111.7 points in June 2022 after a rise of 2.3 per cent in May 2022 (111.3 points). The increase was mainly backed by the increment in real imports of other basic precious and other non-ferrous metals driven by the import of platinum-based metals and influenced by the low base effect from the previous year (June 2021: 106.1 points). Concomitantly, the monthly change of LI increased 0.4 per cent in the reference month attributed mainly by real imports of other basic precious and other non-ferrous metals (0.6 per cent) and the number of new companies registered (0.6 per cent).
In June 2022, the LI which shows the ability to anticipate the future direction of the economy, signals confidence towards further growth in the coming months through smoothed long-term trend index movements that are intact above 100.0 points. This is in line with the anticipated promising signs of strong domestic and export demand as well as the reopening of international borders amid slow global economic growth.
For the current economic scenario, the coincident index (CI) spiked 12.6 per cent y-o-y to record 121.5 points in June 2022 in tandem with the economic performance in the second quarter of this year where strong growth was recorded in June 2022. Furthermore, the CI registered 0.2 per cent month-on-month led by the increases in industrial production index (0.9 per cent), capacity utilisation in the manufacturing sector (0.7 per cent) and total employment in the manufacturing sector (0.2 per cent). The diffusion index for LI recorded 42.9 per cent in June 2022. At the same time, the diffusion index for CI remained at 100.0 per cent since December 2021 representing that all the CI components increased over the past six months. The full publication of the Malaysian Economic Indicators: Leading, Coincident & Lagging Indexes, June 2022 can be downloaded through eStatistik portal.
Foreign buying of Malaysian equities rose 36% to RM615.5m last week – MIDF
According to MIDF Research, foreign buying of Malaysian equities rose 36% week-on-week to RM615.5 million for the week ended Aug 19, from RM451.69 million the prior week. In its weekly fund flow report on Monday (Aug 22), the MIDF Research team noted that last week saw net buying activities by foreigners for every trading day. The amount of net inflows recorded was RM120.4 million last Monday, RM163.9 million last Tuesday, RM153.3 million last Wednesday, and RM132.7 million last Thursday. Friday was also a net buying day, but at a lower rate of RM45.2 million.
Local institutions continued to be net sellers every day last week, with a total net weekly outflow of RM675.9 million. Last Tuesday saw the highest net money outflow of RM193.1 million. To note, local institutions have been net sellers for 13 consecutive days since the week ended Aug 3. Local retailers remained as net buyers for the second consecutive week, with a total net inflow of RM60.4 million. They were net buyers last Monday to Wednesday but turned net sellers last Thursday and Friday.
To date, international investors were net buyers for 22 out of 33 weeks of 2022, with a total net inflow of RM7.72 billion. Local institutions were net sellers for 26 out of 33 weeks, with a total net outflow of RM9.48 billion. Local retailers were net buyers for 21 out of 33 weeks of 2022. Year-to-date, they have net bought RM1.76 billion. In terms of participation, there was an increase in average daily trade value among all investor classes, with retail investors at 21.3%, institutional investors at 20.7%, and foreign investors at 11.7%.
Eye On The Markets
This week, on Friday (26Aug), the Ringgit opened at 4.4740 against the USD from 4.4850 on Monday (22Aug). Meanwhile, the Ringgit was 3.2179 to the Sing Dollar on Friday (26Aug). On Monday (22Aug), the FBM KLCI opened at 1501.61. As at Friday (26Aug) 10:00am, the FBM KLCI is up 3.76 points for the week at 1505.37. Over in US, the overnight Dow Jones Industrial Average closed up 322.55 points (0.98%) to 33,291.78 whilst the NASDAQ added 207.74 (1.67%) to 12.639.26.