Foreign funds sell RM438.4mil of Malaysian shares ahead of GE14

  • Markets
  • Monday, 07 May 2018

An analyst told Bernama that the macro factors expected to affect the FTSE Bursa Malaysia KLCI next week, includes the Group of Seven(G7) meeting as investors search for clues on the trade outlook, as well as the timing of the next interest rate hike by the US Federal Reserve (Fed) which meets on June 12.

KUALA LUMPUR: Global investors turned net seller for the first time in four weeks in the penultimate week before the 14th General Election (GE14), according to MIDF Research.

In its weekly fund flow report, MIDF said the net amount withdrawn by foreign investors last week amounted to RM438.4mil net, the second highest weekly outflow so far this year.

“As a result, the year-to-date inflow stands at RM3.02bil net, making Malaysia only market with inflows among the four Asean markets we track so far in 2018,” the research house said.

It seems that foreign investors are shifting to the sidelines earlier than expected before this year’s election.

“Tracing back to the penultimate week before the GE13, foreign investors snapped up RM750.4mil net of local equities. Foreign attrition was only seen on the last trading day before GE13 which only amounted to RM91.7mil net,” MIDF said.

Monday’s heavy of inflow of RM249.1mil net was offset by three straight days of outflows after the Labour Day break with Wednesday recording the highest daily outflow since early February 2018, totalling up to RM291.7m net.

“We reckon that risk-on sentiment was hampered during this period due to; (i) GE14 fever; (ii) U.S-China trade talks and; (iii) the Fed’s acknowledgement of inflation nearing its target without any hints to steer away from gradually tightening its policy,” MIDF said.

In the week ahead, the FBM KLCI will probably stage a relief rally on Thursday after GE13 reflected by an influx of foreign inflows, assuming the federal ruling incumbent retains its position.

To recap, foreign inflows mopped up RM1.43bil worth of local equities during GE13.

Foreign participation remained solid as the average daily trade value (ADTV) reached RM1.29bil, the highest in 7 weeks.

Local institutional funds took the opportunity, given the presence of foreign sellers to buy stocks which resulted in the second highest weekly net buying so far in 2018 of RM605.4mil net with the local institutional ADTV reaching RM2.32bil,a fairly healthy level.

Meanwhile, Tenaga Nasional Bhd registered the highest net money inflow of RM35.70mil last week.

Public Bank Berhad recorded the second highest net money inflow of RM22.95mil while AEON Credit Service (M) Bhd saw the third highest net money inflow of RM7.19mil.


On the other hand, KL Kepong Bhd saw the largest net money outflow of RM13.12mil last week while Petronas Chemicals Bhd recorded the second largest net money outflow RM10.92mil.

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