KUALA LUMPUR (Oct 28): CGS-CIMB Research noted that the average daily turnover volume and value on Bursa Malaysia rose 32% and 19% week-on-week (w-o-w) respectively to 8.6 billion units and RM5.2 billion last week as the introduction of the conditional movement control order (CMCO) in the Klang Valley from Oct 14 helped to lift participation of retail investors in the market.

CGS-CIMB Research said retail investors’ share of the total trading value grew to 38% (vs. 34.7% in the previous week), followed by institutional investors at 22.7% (vs. 24.9%), proprietary trade at 20.2% (vs. 23.8%) and nominees at 19.1% (vs.16.6%). 

Of the total institutional trade of RM11.8 billion last week, 50.6% were domestic, while 49.4% were foreign investors, it added in an October 27 report.  

Year to date, CGS-CIMB Research stated that retail investors made up a 33.5% (local/foreign at 98.9%/1.1%) share of the total trading value, institutional investors made up 31.2% (local/foreign at 54%/46%), proprietary made up 18.2% (Investment account/Proprietary Day Trader at 80.2%/19.8%) and nominees made up 17.2% (local/foreign at 87.7%/12.3%).

The local research house also pointed out that retail investors were the sole net buyers of Malaysia equities last week. It shared that data revealed retail investors’ participation not only rose week-on-week but they were the sole net buyers in the market last week, despite rising political uncertainties. 

This suggests retail investors may have higher risk appetites, as well as liquidity, compared to other groups of investors, CSG-CIMB Research said.  

What are retail investors buying?

The local research house said retail investors were net buyers of consumer, industrial and property stocks. It also found retail investors to be net buyers of companies in the consumer, industrial and property sectors last week while they continued to take profit in the healthcare sector. 

“Last week’s flows suggest that retail investors were net buyers of Rubberex Corp Bhd, Mah Sing Group Bhd and Supermax Corp Bhd and net sellers of Top Glove Corp Bhd, Press Metal Alumimnium Holdings Bhd, YTL Corp Bhd and My EG Services Bhd. The flows suggest retail investors may be dipping into stocks with potential positive news flows or with share prices that had corrected recently,” CGS-CIMB research noted.  

“One common thread is that the rubber gloves sector continues to feature prominently in the retail investors’ trading radar.  On a year-to-date (YTD) basis, we are not surprised Top Glove was the main beneficiary of retail net buy flows, followed by Genting Bhd and CIMB Group Holdings Bhd (key laggards in KLCI). Retail investors appear to prefer stocks with lower P/Es in the glove sector and were net sellers of Hartalega Holdings Bhd YTD,” it added.  

Meanwhile, the local research house noted that local institutions were net sellers of consumer products and property stocks. 

“Stocks in the consumer products, property and energy sectors were the key sells for institutional investors, while the key sectors that saw inflows from this group were healthcare, industrial products and utilities,” it added.  

As for foreign investors, CGS-CIMB Research said they were net buyers of the telco sector as they continued to be net sellers of banks, property and healthcare.  

The local research house observed that institutional investors – domestic and foreign - were keen on Top Glove.

“There were two common features between local and foreign institutional investor flows last week – both were net sellers, but the stock with the highest net buys for both groups was Top Glove, possibly in anticipation of a potential resolution of its labour dispute with the US Customs and Border Patrol and as a liquid play benefitting from Covid-19,” it said.