Foreign investors continue selling trend for a fifth successive week

KUALA LUMPUR: Foreign investors are keeping up their selling streak of Malaysian equities.

This was for the fifth consecutive week, which ended on Oct 7 and it is perhaps understandably due to the political uncertainty amidst the expectation of Parliament being dissolved.

In a note MIDF Research said the silver lining was that the outflow was recorded at RM336.9mil for the week under review, which was just less than half of the RM740.6mil that marked the previous week’s outflows.

In its weekly fund flow report, MIDF Research observed that Tuesday Oct 4, was the only day in the last 18 trading days where the FBM KLCI recorded a positive inflow from foreign investors, at RM59.6mil.

“The top three sectors which saw net outflows by foreign investors last week were financial services at RM310.8mil, technology at RM52.7mil and consumer products and services at RM42.1mil.

“The top three sectors that experienced net buying were construction at RM117.8mil, telecommunications and media at RM32.5mil and energy at RM27mil,” said MIDF Research.

However, the research house also noted positively that year-to-date, international funds have been net buyers for 24 out of the 40 weeks of 2022, with a total net inflow of RM6.29bil.

Meanwhile, there was also reduced trading participation last week, with the average daily trading value of foreign investors declining by 31.5% and local institutional investors also lowering their trading by 17.8%.

MIDF Research reported that the investment inflow gainer was Petronas Chemicals Group Bhd (PetChem), which saw the largest inflow of RM7.9mil.

PetChem’s share price was also up 2.15% and closed at RM8.57 for the week.

Concurrently, the research house noted, Press Metal Aluminium Holdings Bhd, who saw its share price gain almost 8% to RM4.35, experienced a net inflow of RM4.1mil for the week ended Oct 7.

Both stocks have outperformed the FBM KLCI, which rose 0.82% last week.

MIDF Research said Telekom Malaysia Bhd, while registering close to RM4mil of inflows for the week ended Oct 7, saw a 5.3% drop in its share price to RM5.18, and the research house believes this to indicate a “buy on weakness” stance among investors for the stock.

On the other hand, it was also reported that Hong Leong Bank Bhd’s stock closed 0.5% higher for the week in review at RM20.60, despite registering a net outflow of about RM900,000.

It was surmised that this could have been investors buying the stock on strength last week, said MIDF Research.