KUALA LUMPUR: Foreign investors purchased a “whopping” RM1.76 billion of Malaysian equities last week, resulting in foreign liquidity dominating trading on the local exchange as optimism towards the local market rose, according to MIDF Research.

It said such an amount had not been seen since May 2013, following the outcome of the 13th general election (GE13).

In its weekly fund flow report yesterday, the research house said the last time the amount actually exceeded RM1 billion was last March.

“Foreign investors have now been net buyers on Bursa for six consecutive weeks. As [of] last Friday, foreign net buying had extended for six trading days. Notably, the average amount mopped per day during the six days was RM305 million,” it said.

MIDF Research said in March 2016, when trading on Bursa was this intense, the average amount mopped up was only RM264 million.

“Last Friday, the buying turned into a frenzy. Foreigners acquired a massive RM816 million, the highest since May 7, 2013, two days after GE13,” the research house said.

It said foreign participation also surged to a level not seen since May 2013, with the average daily trade value (ADTV) jumping to RM1.69 billion, a 71% rise compared with that in the preceding week.

“The return of foreign investors has accorded a much-needed breathing space for local investors to lighten their position and realise profits,” it said.

Meanwhile, local institutions offloaded RM1.58 billion net last week, it said, adding that local fund managers have disposed of RM2.8 billion net since the beginning of the year.

“The retail market remained vibrant as retailers took advantage of the foreign liquidity avalanche to offload RM180 million. Retail ADTV surged to RM1.2 billion, [the] second week in a row it exceeded RM1 billion,” it said.

Regionally, global money also returned strongly to Asian equities last week, said MIDF Research, with foreign purchase amounting to US$4.3 billion (RM19.05 billion), the highest seen this year.

The bulk of the flow was skewed to the North Asian markets, it said, with the most significant beneficiary being Taiwan, which recorded a net foreign inflow of US$1.38 billion, “the highest since July last year after two weeks of hesitation”.