Foreign funds resume selling on Bursa

KUALA LUMPUR: International investors were back in selling mode, disposing of RM151.1 million net of local equities from Monday to Wednesday, after the market rebounded to record a net foreign buying last week, after the 25th consecutive week of net foreign selling.

The market was closed on Thursday for the Maal Hijrah celebration.

Foreign investors acquired RM274.4 million net from Monday to Friday in the preceding week, while for the period between Monday to Wednesday, it registered a net sell of RM28.9 million.

For the holiday-shortened week from Aug 17-19, local institutions recorded a net buy of RM216.6 million compared with a net sell of RM920.0 million for the whole of the previous week.

Meanwhile, the local retail disposed of RM65.6 million from Aug 17-19 against a net buy of RM645.6 million for the whole week previously.

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said international investors continued to make their way to Bursa Malaysia as they snapped up RM139.3 million net of local equities on Monday.

"Risk-on appetite was mainly fuelled by the liquidity measures announced by China. The People’s Bank of China added US$101.0 billion of one-year funding via the medium-term lending facility to support banks amid intensifying liquidity stress and keeping a fragile economic recovery on track," he said.

However, he saw the four-day foreign net buying streak on Bursa Malaysia was snapped on Tuesday as offshore investors took out RM110.1 million from the local equity market.

"Most investors moved to the sidelines as the US announced further restrictions on Huawei Technologies Co to cut the Chinese company’s access to commercially available chips," he said.

Adam said the pace at which international funds were selling local equities accelerated to RM180.3 million net on Wednesday as foreign investors cashed in gains ahead of the public holiday on Thursday.

Adding to the weak sentiment, he viewed US President Donald Trump’s move to call off last weekend’s trade discussions with China raised questions regarding the agreement that the two countries reached this year.

As a result, he said China’s CSI 300 index fell 1.5 per cent on Wednesday, the largest decline in nearly a month.

"The local bourse followed suit to settle 0.2 per cent lower at 1,575.4 points on the same day," he noted.

However, in comparison to other Asian peers, namely South Korea, Taiwan, the Philippines, Indonesia and Thailand, Malaysia has the third smallest foreign net outflow of RM19.65 billion on a year-to-date basis, matching the level of foreign net selling seen in 2015, he commented.

On a weekly basis, the FBM KLCI was 12.53 points higher at 1,577.12 on Friday compared with 1,564.59 the previous Friday.

Moving forward Adam reckoned that lack of fresh leads from the external and local fronts would keep the local bourse in check next week.

He said the only major economic data release next week will be July's trade data, which is likely show a continuation of growth in exports.

Market experts believed the local bourse would be influenced by weak corporate earnings reports, local economic data, concerns over the US-China relations, and how the less dovish US Federal Reserve would affect ringgit sentiment. - Bernama
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Fund flow , local equities , inflow , FBM KLCI


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