PETALING JAYA: Net outflow of foreign funds from Malaysian equities had tripled last week from the week before.
This is driven by heavy selling of financial services stocks as other Asian equities continued to attract inflows from foreign funds amid an improved regional outlook.
In total, the local equity market registered a net foreign outflow of RM168.5mil for the trading week ended Jan 20, more than three times the net selling of RM46.8mil by foreign investors for the week ended Jan 13, according to data compiled by MIDF Research.
Of the eight Asian exchanges that the brokerage tracks, Malaysia and India were the only two markets registering net foreign outflow from equities last week, while the other six equity markets, namely South Korea, Taiwan, Indonesia, Thailand, Vietnam and the Philippines, posted net foreign inflows.
“Based on the provisional aggregate data for the eight Asian exchanges, investors classified as ‘foreign’ net bought US$2.4bil (RM10.22bil) last week,” MIDF Research said.
Malaysia experienced the largest net foreign outflow last week among the eight Asian exchanges, it added.
MIDF Research noted that while Bank Negara surprised the market by keeping the overnight policy rate unchanged at 2.75% last Thursday, most economists believed the lending rate could be raised by another 25 basis points at the monetary policy meeting in March as core inflation remained elevated.
Year-to-date, foreigners have offloaded RM142.9mil worth of Malaysian equities.
MIDF Research revealed that the three sectors with the largest foreign outflow last week were financial services (RM272.4mil), industrial products and services (RM9.9mil) and transportation and logistics (RM2.4mil).
The three sectors with the largest net foreign inflow were energy (RM31mil), healthcare (RM30.5mil) and technology (RM21.3mil).
The brokerage said local institutions remained net buyers for the second consecutive week after net buying RM391.6mil worth of equities last week.
Year-to-date, local institutions have bought RM606.5mil worth of domestic equities.
Meanwhile, local retailers have net sold RM223.1mil worth of domestic equities last week, slightly lower than the RM292.6mil net sold the week prior, amid profit-taking ahead of the Chinese New Year holidays.
Year-to-date, local retailers have net sold RM463.6mil of Malaysian equities.
In terms of participation, there was a decrease in average daily trading volume among local retailers (minus 10.5%), local institutions (minus 10.3%) and foreign investors (minus 11.9%), MIDF Research noted.
Within the region, Taiwan’s equity market was biggest gainer last week, with US$1.1bil (RM4.69bil) of net foreign inflow, as foreigners could be accumulating Taiwanese equities ahead of the Lunar New Year holiday, which would see the bourse closed from Jan 18 to 27.
The second biggest gainer was South Korea’s equity market, which registered a weekly net foreign inflow of US$1.08bil (RM4.60bil).
This could be due to the prospect of an increased foreign access to its domestic capital markets after the country’s financial regulator announced its stock market deregulation plans last week.