Identifying winning market positions | The Star
BASED on the statistics provided by Bursa Malaysia, year-to-date, the biggest buyers on the local bourse in the form of market participants are the retail investors with a total net inflow of approximately RM11.7bil as at Nov 24, 2021.
While we have witnessed net buying among foreign institutional investors over the past three to four months, the net inflow is still not significant to reverse the year-to-date net outflows, which presently stands at RM1.8bil.
With that, the local institutions have emerged as the largest net sellers in the market with an outflow of RM9.9bil.
The above is just a snapshot of market flows and it does not show or is able to exhibit to what extent the inflows/outflows have been proven to be the right investment decisions by the respective market participants, especially in relation to individual stocks.
Overall, we know that the benchmark FBM KLCI has underperformed with the index down by 6.7% so far this year, but does that mean that investors have not been making profitable trades?
Have investors been able to generate positive returns, or have they been catching falling knives?
To answer this sixty-four-thousand-ringgit question, one would need to have a greater and more powerful tool to identify who in the first place is a better market participant among the three groups of investors.
And second, which particular company has been the greatest provider of positive returns to investors.
Bursa Malaysia’s data analytics and commercialisation arm, partnering with a little-known fintech startup, DIBots IT Solution Sdn Bhd (DIBots), has been at the forefront of this revolutionary data-based platform that provides detailed trade demographics and insight into the market and stocks.
DIBots Intelligence, as the subscription-based service is called, can provide market data that identifies the trend and helps investors make better investment decisions.
While this is not a marketing or promotional material for the company, this column was rather impressed looking at the data that DIBots can provide, and applauds Bursa Malaysia’s effort to provide more transparency and insights that can assist investors to make more informed investment decisions.
Institutional investors get it
Let’s first look at the fund flows among foreign investors, including those carried out via nominees.
Table 1 shows the top 10 net inflow and outflow by this group of market participants based on data from DIBots. For net inflow, we can observe that except for Nestle, net buying interest among the rest of the top ten stocks is positively correlated to the performance of the underlying shares.
For net outflow, we can conclude that due to the persistent selling pressure in companies like Hartalega Holdings Bhd
, Gamuda Bhd, Dialog Group Bhd, Tenaga Nasional Bhd, and Genting Plantations Bhd, the performance of these companies…