Intensified foreign selling seen on Bursa Malaysia

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 sold stocks listed on Bursa Malaysia at a stronger pace last week, marking the seventh week of foreign attrition, according to MIDF Research. 

“Based on preliminary data from Bursa which excluded off market deals, the net amount offloaded by foreign investors last week breached above the RM1bil level at RM1.21bil net,” the research house said in its weekly fund flow report.

MIDF noted that as of last Friday, the selling streak has been extended to 28 days, just one day shy of the 29-day selling spree in early January to mid-February 2014.

Monday’s attrition hovered above the RM200mil level at RM216.5mil before rising to RM359.0mil net on Tuesday. 

MIDF said investors were nervous on Tuesday amid the historic summit between the U.S and North Korea which also dragged the FBM KLCI down by 0.66% to 1,764 points. 

Selling activity on Wednesday returned to Monday’s level as global investors only sold RM230.4mil net amid dampened risk-on mood as investors awaited the Fed’s decision on interest rates.

Foreign selling peaked during the week on Thursday at RM402.2mil net before the local bourse was closed for the Aidilfitri break on  Friday.  

“It is noteworthy that other Asian counterparts such as Korea, Taiwan, the Philippines and Thailand also experienced huge outflows that day spurred by the Fed’s rate hike,” MIDF said, adding that Malaysia had the second largest weekly outflow among the four Asean markets it monitor. 

Year-to-date,  outflow from Malaysia stood at RM4.23bil net or US$1.06bil net is still the lowest among its Asean peers namely Thailand, the Philippines and Indonesia.

Foreign participation was strong as the foreign average daily trade value (ADTV) increased by 24% to RM2.03bil, logging its 11th straight week above the RM1bil  mark.  

The retail market and local funds meanwhile saw buying activity for its fifth and seventh straight week, respectively.