Foreign investors turn net sellers again

KUALA LUMPUR: The foreign net buying activity on Bursa was short-lived as offshore funds turned net sellers last week, according to MIDF Research.

“Based on data from Bursa, foreign investors sold RM249.3mil net of local equities last week. So far in 2019, there has been 25 weeks of foreign net selling, ” the research house said.

MIDF said Bursa began the week on the right foot after a long weekend as international funds snapped up RM56.8mil net on Tuesday, lifting the local bourse 0.2% higher to settle at 1,604.3 points, the highest close in five trading days.

It said the entrance of foreign funds into stocks listed on Bursa bucked the trend as other markets experienced foreign net outflows following the drone attack on Saudi Arabia’s oil facilities.

International funds started to gradually reduce their exposure from Wednesday until the week ended.

Wednesday saw a foreign net outflow of RM40.5mil net as the anticipation of the Federal Reserve’s decision on interest rates outweighed the positivity from Saudi Arabia’s partial restoration of oil its production.

“The pace of foreign net outflow more than doubled to hit RM97.6mil net on Thursday following the second rate cut this year by the Federal Reserve, ” MIDF said, adding that worries were partially caused by the U.S. policy makers were divided on the need for further easing following Wednesday’s rate cut.

The local stock market barometer followed suit to decline the most during the week by 0.30%.

Foreign net selling activity inched higher on Friday to RM169.9mil despite the series of stimulus measures by other major central banks during the week.

“For the month of September, international investors have thus far sold RM335.8mil net, the lowest amongst its Asean peers.

“On a year-to-date basis, international funds have taken out RM7.68bil worth of local equities from Bursa, ” MIDF said.

In terms of participation, foreign investors experienced the largest weekly gain of 55.8% in the average daily traded value (ADTV) to remain above the RM1bil mark at RM1.79bil.