Intensified foreign selling seen on Bursa Malaysia

Good impact: Gains made on Bursa Malaysia yesterday were due to the positive sentiment in Asian markets and the rise in US stock futures after the US and China agreed not to impose more tariffs on each other

KUALA LUMPUR: The pace of foreign selling on Bursa accelerated last week ahead of the long weekend.

“Based on preliminary data from Bursa which excluded off market deals, international funds dumped RM663.4mil net of local equities last week, the highest in 9 weeks and was 40 times more than the amount withdrawn in the preceding week,” MIDF Research said in its weekly fund flow report.

MIDF noted that international funds snapped up a modest amount of local equities on Monday to a tune of RM18.3mil net.

However, foreigners slowly sold off RM41.0mil net on Tuesday.

Later on Wednesday, the level of foreign net outflows swelled to RM369.9mil net, a level not seen since July 6, 2018 amidst fears of President Trump imposing tariffs on an additional US$200bil worth of Chinese imports.

Other regional peers that we track namely South Korea, Taiwan, India, Thailand, Indonesia and the Philippines also experienced a selldown that day which dragged the Ringgit by 6.11% to US dollar/ MYR4.1477, the lowest level in 9 months.

“Nevertheless, foreign selling on Bursa eased a little to RM209.7mil net on Thursday which helped lift the local bourse by 0.17% after five consecutive days of losses.

“Foreign net attrition shrank further to RM61.1mil net on Friday while the FBM KLCI marginally gained by 0.03% due to last minute bargain hunting ahead of the 4-day weekend,” MIDF said.

The year-to-date outflow from Bursa breached above the RM9bil mark, approximately offsetting 90% of the total foreign net inflow seen in 2017.

“Malaysia still retains its position as the nation with the second lowest foreign outflow amongst the four Asean markets we monitor,” MIDF said.

“We note that the average daily traded value (ADTV) amongst all three investor groups (retail, local institutions and foreigners) experienced a weekly drop,” it said.

The weekly ADTV of the retail market dropped the most during the week by 25.1% to RM850mil while the ADTV of foreign investors only dropped by 5.7% but still remained above RM1bil for its ninth consecutive week.