KUALA LUMPUR: There was an exodus of foreign funds from Bursa last week, marking the fourth uninterrupted week of foreign net selling, according to MIDF Research.
“Based on data from Bursa, foreign investors sold RM1.04bil net of local equities last week, the largest weekly foreign net outflow in 12 weeks,” the research house said in its weekly fund flow report.
MIDF said foreign net selling intensified on Monday as foreign investors offloaded RM357.0mil, the largest in a day since early May this year.
Sentiment was partially dampened by China’s retaliation towards President Trump’s latest tariff threat by letting the Yuan tumble to the weakest level in more than a decade.
It is notable that the heavy foreign net outflow on Monday was in conformity with other regional peers under our coverage.
“The pace of foreign net selling slowed down a little to RM219.9mil net on Tuesday. China’s move to limit the depreciation of the Yuan restored calm in investors’ nerves,” MIDF said.
It added that the level of foreign net outflow heightened to RM269.5mil following a batch of surprise interest rate cuts by central banks across the Asia Pacific (New Zealand, Thailand and India) to counter the risks in the global economy.
MIDF said optimism returned to the markets on Thursday as foreign net selling substantially dropped to RM30.7mil amidst the green light granted by Japan to allow exports of semiconductor manufacturing material to South Korea.
Nevertheless, such positive vibes diminished the next day as foreign funds dumped RM158.1mil as the U.S puts the decision for U.S companies to restart business with Huawei Technologies Co. on hold as China halts crop buying from the U.S.
“Last week’s massive net outflow brings the year-to-date the foreign net outflow from Malaysia to stand at RM6.01bil. This makes up around 51.0% of last year’s total foreign net outflow,” MIDF said.
Last week, foreign investors experienced a 18.5% weekly drop in the average daily traded value (ADTV) but still remained healthy at above the RM1bil level.
Meanwhile, the retail market and institutional funds recorded a weekly increase in ADTV of above 5.0%