KUALA LUMPUR: An exodus of foreign funds from Bursa was observed last week, extending the foreign net selling streak to the eighth week, according to MIDF Research.
“Based on data from Bursa, foreign funds sold RM1.18bil net of local equities last week, a level not seen since October last year,” MIDF said in its weekly fund flow report.
The research house said Bursa Malaysia had a rough start to the week as global investors sold RM288.6m net on Monday.
It noted that Tuesday then saw a rather similar tune of foreign net outflow worth RM253.1mil net as China announced retaliatory tariffs on about US$60bil of U.S goods effective June 1.
The escalation of the trade rift occurred even as President Trump will be meeting Xi Jinping at the G-20 summit in June.
The local bourse was also adversely impacted, closing below 1,600 points for the first time since September 2015.
MIDF said the level of foreign net outflow tapered to RM91.6mil net on Wednesday, the lowest during the week, coinciding with a 0.8% gain for the local bourse.
It said much of the market hype was spurred by the disappointing growth in China’s industrial output and retail sales for April 2019, increasing the likelihood of an economic stimulus for the nation.
Thursday experienced a spike in foreign net selling to hit RM371.7mil. The trade war angst between the U.S and China outweighed the positive vibes from the local front which saw the nation’s 1Q19 GDP which exceeded expectations.
A slowdown in foreign net outflow occurred on Friday as the amount sold went below RM200mil.
Sentiment was revived partly due to the rise in U.S equities overnight after solid corporate earnings of companies such as Walmart and better-than-expected April housing data.
“On a month-to-date basis, Malaysia has recorded a foreign net outflow of RM1.71bil in May 2019. This brings the year-to-date foreign net outflow from Malaysia to RM4.46bil,” MIDF said.
“Participation amongst foreign investors gained momentum last week as the average daily traded value (ADTV) rose 2.7% to RM1.21bil which is a healthy level,” it added.