EPF, PNB, Vanguard were top sellers of Malaysian equities in 1Q22

TheEdge Thu, Jun 30, 2022 07:12pm - 1 year View Original


KUALA LUMPUR (June 30): The top two domestic institutional investors in Malaysia’s equity market and the top foreign institutional investor were the top three institutional sellers of the local bourse in the first quarter of 2022 (1Q22), according to Bursa Malaysia's institutional investors capital flow report released on Wednesday (June 29).

The top three institutional sellers in the period were the Employees Provident Fund (EPF) at US$436.4 million (about RM1.92 billion), Permodalan Nasional Bhd (PNB) at US$237.2 million and US-based The Vanguard Group Inc at US$190.6 million, Bursa said, citing S&P Global Market Intelligence data.

Notably, EPF and PNB were the top two holders of equities on Bursa Malaysia as at 1Q22, with US$37.8 billion and US$31.1 billion respectively, while Vanguard is the top holding foreign institution with US$4.6 billion.

Conversely, the top three buyers were: BlackRock Fund Advisors (US$180.5 million), Hermes Investment Management Ltd (US$79 million) and Candriam Belgium SA (US$78.6 million).

Overall, Malaysian equities saw domestic investors recording net disposal of US$505.8 million in the quarter, Bursa said.

GLIC disposals slowed q-o-q as PNB tapered selling

Among the nine government-linked investment companies (GLICs), cumulative capital outflow narrowed quarter-on-quarter (q-o-q) to US$667.7 million in 1Q22, from US$1.28 billion.

This follows slower tapering by PNB to US$237.2 million, from US$1.49 billion.

Including EPF and PNB, the nine GLICs were Amanahraya Investment Management Sdn Bhd, Khazanah Nasional Bhd, Kumpulan Wang Persaraan (KWAP), Lembaga Tabung Angkatan Tentera (LTAT), Lembaga Tabung Haji (LTH), the Social Security Organisation (Socso or Perkeso), and PMB Investment Bhd.

Bursa observed that inflows among the GLICs were mainly into the industrial and healthcare sectors.

GLICs have also been raising their positions in the industrial and energy sectors for the past four quarters, it said.

“On the other hand, outflows were primarily from the plantation counters as GLICs took profit from the high equity prices in tandem with rising commodity prices. The GLICs have also been reducing their stakes in the financial sector for the past three consecutive quarters,” Bursa said.

The stock exchange said IHH Healthcare Bhd received the highest GLICs’ net inflow at US$81.4 million, followed by MISC Bhd (US$57.9 million) and Inari Amertron Bhd (US$47.7 million).

Inversely, Kuala Lumpur Kepong Bhd bore the brunt of GLICs’ net outflow in 1Q22 at US$320 million, followed by Malayan Banking Bhd (US$188 million) and Sime Darby Plantation Bhd (US$151 million).

Bursa attracted growth-oriented investors, deter deep value investors

In a separate note on Thursday (June 30), CGS-CIMB Securities Sdn Bhd said the tracked GLIC funds posted their third consecutive quarter of capital outflows from Malaysian equities.

The outflow by EPF and KWAP in 1Q22 was also their highest over the past four quarters, said CGS-CIMB analyst Ivy Ng Lee Fang. KWAP posted capital outflows of US$65.1 million in 1Q22, against capital inflow of US$17.8 million in 4Q21.

“Socso and LTH were the two GLIC funds that posted the highest capital inflows in 1Q22, of US$48.2 million and US$42.3 million respectively,” Ng said.

She also noted that Malaysian GLIC funds had managed around RM1.7 trillion of assets and held around a quarter of total market capitalisation of Bursa.

“We noticed that deep value, and value and yield investors were the main drivers of outflows in 1Q22, at US$316.9 million and US$222.6 million, respectively. EPF (value) and PNB (yield) were the leading institutions of such investment styles on Bursa,” Ng said.

As for inflows, she highlighted that they were predominantly led by growth-oriented investors in which Candriam was the top growth buyer on Bursa in 1Q22.

At end-1Q22, 95 Malaysian investor firms owned US$119 billion worth of Malaysian equities, representing around 29% of the total market capitalisation on Bursa.

Based on fund trade flows, US investors became the top foreign investors (US$11 billion) in Malaysian equities by value, followed by Singapore (US$5.9 billion) and the UK (US$3.2 billion).

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