KUALA LUMPUR: Foreign funds remained in selling mode, offloading about RM500mil during the election-shortened week, according to MIDF Research.
“Based on preliminary data from Bursa which excluded off market deals, the net amount withdrawn by foreign investors on the two trading days amounted to RM504.8mil net, exceeding the RM438.4mil in the preceding week,” MIDF said in its weekly fund flow.
As a result, the year-to-date inflow dipped to RM2.52bil net.
Nonetheless, MIDF said foreign and local institutional participation was robust as their average daily trade values (ADTV) stood at RM1.22bil and RM2.85bil (the highest in 10 weeks), respectively.
MIDF said Malaysia also remained as the largest beneficiary of inflows among the four Asean markets that it track.
“The outflows on these two days extended the foreign selling spree from last week to five days, the longest since February 2018.
“It is noteworthy that Monday recorded the highest outflow which amounted to RM273.6mil net,” it said.
MIDF noted that on the eve of GE14, foreign selling activity shrank by RM42.4mil to RM231.2m net, with the local bourse climbing, boosted by buying activity from the local institutions which have been net buyers for five days straight.
Today marks the first trading day after the GE14 which witnessed the end of the six-decade rule by Barisan Nasional.
“In the wake of the election surprise win by Pakatan Harapan, some level of foreign attrition is bound to occur in the short term amidst the political uncertainties.
“Nonetheless, this could be capped by investors’ perception towards Tun Mahathir, Malaysia’s seventh Prime Minister who has 22 years of experience in leading Malaysia before joining the then-opposition in 2016,” MIDF said.
The new Prime Minister noted that he will focus on addressing concerns over economic and state finances including reducing government debt but not devaluing the ringgit.
“In the long run, we expect that foreign investors will return to Malaysia as Pakatan Harapan gradually works on its promises made during GE14,” MIDF said.
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