THE Employees Provident Fund (EPF) has turned net buyers of blue chip stocks, acquiring an estimated RM2.2 billion worth of stocks over the past two months.
In March this year, when word got out that EPF was net seller of stocks, retail investors also cooled down their interest in the equity market here.
Analysts said that the latest accumulation spree has helped the benchmark FTSE Bursa Malaysia KLCI to achieve its all-time high of 1,645 points on July 18.
“I am sure that EPF’s buying has helped push the KLCI over the past two months. In some ways, it is good that EPF is doing this, as it helps to instill confidence in the market,” said Inter-Pacific Securities head of research Pong Teng Siew.
A look at the benchmark index component stocks showed that EPF was net buyer in 15 component stocks and net seller in nine stocks.
Among notable purchases over the past two months include net buys of over 103 million shares in Malayan Banking Bhd worth at least RM893.5 million, 42 million Axiata Group Bhd shares worth at least RM223.44 million, and over 80 million Telekom Malaysia shares worth over RM441 million.
Notable sells during the period include 19 million Public Bank Bhd shares worth RM280 million, five million Hong Leong Bank Bhd shares worth RM69 million and seven million Tenaga Nasio-nal Bhd shares worth RM47.8 million.
EPF was also net seller for the two out of the four plantation stocks in the benchmark index – IOI Corp Bhd and Kuala Lumpur Kepong Bhd.
“It appears that there is a portfolio shift in terms of allocation.
“The reduction of exposure in plantation stocks is understandable, as crude palm oil prices tend to be lower between April and October. As for its increasing exposure in telco stocks, I believe it’s partly to do with the stocks’ defensive nature,” added Pong.
During these two months, there were 12 FBMKLCI component stocks that hit its 52-week high, they include Tenaga Nasional Bhd, Public Bank Bhd, Maxis Bhd, DiGi.Com Bhd, Axiata Group, Telekom Malaysia Bhd, Petronas Dagangan Bhd, UMW Holdings Bhd, YTL Corp Bhd and more.
“While the buying from EPF has helped push these blue chip stocks and benchmark upwards, I believe it has not helped lift the confidence of retail investors, as liquidity and turnover on second-liner stocks, medium to small cap stocks, remained at a low level,” said another research head from a local brokerage.
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