KUALA LUMPUR: Foreign selling of Malaysian equities continued for the third day on Wednesday but at a slower pace after Tun Dr Mahathir Mohamad led the Pakatan Harapan coalition to a stunning victory in the 14th General Election.
Foreign funds were net sellers at RM320.7mil on Wednesday but local institutions were net buyers RM223.2mil and retail investors at RM97.5mil.
The foreign selling was sharply lower compared with the RM837.3mil on Tuesday and RM682.6mil on Monday. Over the past three trading days, net selling totaled RM1.84bil.
On Monday when the financial and equities markets opened for trading, foreign funds were net sellers at RM682.6mil but local institutions were net buyers at RM238.2mil and retail investors at RM444.4mil.
On Tuesday, foreign funds stepped up their selling to net RM837.3mil but local institutions were net buyers at RM661.7miil and retailers at RM175.6mil.
The selling by foreign funds could be due to concerns about how the new government, which defeated the Barisan Nasional, could put in place its proposals especially the withdrawal of the Goods and Services Tax and the reintroduction of fuel subsidies.
On Wednesday, the Finance Ministry announced the GST would be set at zero percent beginning June 1, 2018.
The Ministry said that the reduction of the rate from the current 6% to 0% will be implemented nationwide until a further announcement is made.
This decision does not include goods and services listed in the Goods and Services Tax (Exempt Supply) Order 2014, which remain exempted from GST.
Meanwhile the government kept fuel prices unchanged, the ninth week running since March 22. RON95 petrol will retail at RM2.20 per litre, RON97 will retail at RM2.47 per litre, and diesel will be priced at RM2.18 per litre.
Dr Mahathir said on Wednesday the government would be reviewing the employment of approximately 17,000 political appointees as part of its reform plans to reduce government expenditure.
He also said there is a lot of wastage in government expenditure, a problem that needs to be solved.
The government was also relooking at the large scale infrastructure projects especially the East Coast Rail Link.
Upon completion, the RM60bil project which will link Port Klang to Pengkalan Kubor, Kelantan, will also ensure a more efficient movement of people and goods, through 24 stations.
The 668 km ECRL is targeted for completion in 2024.