Foreign funds and retail investors bought just over 27% of Malaysian equities in December, over the figure CIMB Research predicted would be large enough to have a significant effect on the market. Net inflows of foreign funds increased in Malaysia and across most of Asia in 2010, spiking around three months ago but slowing down since then.

Foreigners bought RM11 billion (US$3.59 billion) of Malaysian stocks last month, and sold RM8.4 billion ($2.74 billion). RM10.8 billion of the purchases were from funds, with ordinary retailers making up the remainder. On average, foreign stock ownership in Malaysia is around 22%.

Some say the slowdown is due to European and American end of year holidays, while the end of the US Federal Reserve’s second round of Quantitative Easing (ie: increasing the money supply) might also see fewer dollars coming to Asia in the coming months.

source & article: Business Times