Foreign investors sell off RM2.48bil of Malaysia shares; heaviest selldown since August 2013

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: Foreign funds reacted to the unprecedented outcome of Malaysia’s General Election (GE14) by dumping RM2.48bil of local equities last week.

“This is the heaviest weekly selldown in Malaysia since the week ended August 23, 2013 with a net outflow of RM2.90bil. Year-to-date net inflow now stands at RM40.2mil,” MIDF said in its weekly fund flow report.

MIDF noted that the the first trading day after GE14 saw a net outflow of RM682.6m net.

Nevertheless, the trading value on Bursa was the highest ever recorded on the same day at RM7.30bil.

Foreign selling on Tuesday then swelled to RM837.3mil net, the largest in a day since early February 2018.

On Wednesday, foreign outflows tapered to RM320.7mil as investors cheered the post-GE14 reforms which included the reduction of GST to 0% effective from June 1 in addition to the pardon granted to jailed former Deputy PM Datuk Seri Anwar Ibrahim.

The FBM KLCI followed suit to settle 0.54% higher at an eight-day trading high of 1,858 points as buying activity by retailers and local funds continued amid renewed optimism.

MIDF said foreign investors continued selling on Thursday and Friday to a tune of RM384.4mil net and RM251.2mil net as the surge in U.S treasury yields during the week crept into minds of investors.

“Due to the intense selling pressure, the cumulative net inflow into Malaysia so far this year has been substantially reduced to RM40.2mil from RM2.52bil before GE14.

“We are cautiously optimistic that this cumulative figure may gradually pick up as more political clarity comes into picture,” MIDF said.  

“Despite recording the largest weekly outflow among the 4 Asean markets we monitor last week, Malaysia is still the major beneficiary of foreign inflows,” the research house added.

Foreign participation remains strong as the foreign average daily trade value(ADTV) soared by almost 100% to RM2.39bil, the highest in 24 weeks.

Similarly, participation in the retail and institutional market was robust as their ADTVs reached a level not seen 18 weeks.

Meanwhile, CIMB Group Holdings Bhd registered the highest net money inflow of RM41.21mil last week.

Genting Malaysia Bhd recorded the second highest net money inflow of RM14.15mil while Genting Bhd saw the third highest net money inflow of RM10.95mil.

On the other hand, Felda Global Ventures Bhd saw the largest net money outflow of RM14.52mil last week.

Petronas Dagangan Bhd recorded the second largest net money outflow RM13.12mil while IHH Healthcare Bhd registered the third largest net money outflow of RM12.16mil.