KUALA LUMPUR: Foreign funds turned to selling mode last week after four straight weeks of buying into stocks listed on Bursa Malaysia.
“Based on data from Bursa, foreign funds sold RM6.9mil net of local equities last week, the smallest weekly foreign net outflow thus far this year,” MIDF said in its weekly fund flow report.
The research house said a bout of foreign funds entered Bursa at a tune of RM17.8mil on Monday as the 1.3% year-on-year drop in China’s exports for June 2019 was lesser than market expectations.
The local bourse took cue as it advanced marginally by 0.2% to settle at 1,672 points on the same day.
MIDF said foreign investors disposed RM42.6mil net of equities on Tuesday ahead of the release of US retail sales data.
Foreign net selling remained on Wednesday albeit at a slightly slower pace of RM39.8mil.
“Sentiment was dampened mainly by the possibility of President Trump to impose additional tariffs on China despite promising to hold off more duties in a trade-war truce reached with China’s Xi Jinping last month,” the research house said.
Positive vibes returned to the market on Thursday with international funds accumulating RM40.2mil net of local equities.
Risk-on mood was reignited by the rally in Taiwanese chip makers following better forward guidance by TSMC underpinned by stronger chip demand.
Friday then saw a foreign net inflow of RM17.5mil, coinciding with the FBM KLCI’s first advance in four days to close 0.6% higher at 1,658 points.
The mood on Friday was supported by the latest phone talks between senior U.S and China officials regarding trade.
“The month of July has so far seen a foreign net inflow of RM308.2mil. Meanwhile the year-to-date foreign net outflow from Malaysia stands at RM4.36bil,” MIDF said.
“In contrast, the other six Asian markets we monitor (Korea, Thailand, Indonesia, India, Taiwan and the Philippines) have seen a foreign net inflow so far for the year with India having the largest,” it added.
Overall investor participation weakened last week as the average daily traded values (ADTV) dropped.
The biggest weekly decline in ADTV was observed for local institutional funds at 12.4%