• Last week Malaysian stocks ended stronger, with KLCI at 1,808.59 up by 1.4% versus the previous week.

• Local institutional and retail investor were net sellers as US-China trade tensions, and holiday period continued to dictate local sentiment.

• Foreign funds small net buyers worth RM46.5mil.

• For YTD 2018, local investors continued support for the market with a share worth RM8.7bil. Post GE, foreign funds are net sellers amounted to RM11bn.

Foreign funds returned

Key highlight for the week is the positive net buy of RM46.5m as opposed to net sell of RM631m in week 33. To-date foreign selling of Malaysian equities is RM8.7bn. The bulk of this selling came in 2Q18 with a total of RM9.2bn. Since GE14, foreign funds have sold a total of RM11bn worth of equities.

Key domestic events for week 34 were a flurry of earnings announcements, including KLCI’s Axiata and IOI Corp, and PM’s visit to China and pronouncement on construction projects.

On the external front, the US markets were firmly higher, buoyed by good earnings and Federal Reserve’s chairman speech on Friday.

Week 35 outlook

It will be another short week with Friday a public holiday.

The net buying by foreigners, albeit a small amount, and KLCI staying above 1,800, could continue to improve sentiment. Earnings announcement will reach its climax this week, wrapping the 2Q18 season.

Source: BIMB Securities Research - 27 Aug 2018