Foreign outflow on Bursa Malaysia jumps to RM1.59bil net

KUALA LUMPUR: The outflow of foreign outflows ramped up significantly to RM1.59bil over the last week as global equity markets experienced a sell-off amid confirmation from the Federal Reserve that inflation rates remained too hot to start interest rates cuts.

According to MIDF Research, selling by foreign funds was Bursa Malaysia's highest net outflow since the country was locked down under the movement control order (MCO) in March 2020.

The sectors leading the net foreign outflow were financial services (RM425.8mil), consumer products and services (RM308.9mil) and industrial products and services (RM206.3mil).

The only sector with a net foreign inflow over the week was telecommunications and media (RM9.3mil).

Local institutions continued to support the local bourse with net purchases of RM1.79bil for the week, representing a six-year high since February 2018.

Meanwhile, local retailers remained net sellers for the sixth consecutive week, with net sales amounting to RM195.8mil. They net bought RM59.5mil on Monday but were net sellers for the rest of the week.

In terms of participation, the average daily trading volume (ADTV) saw increases across the board, led by local institutions (30.2%), followed by foreign investors and local retailers at 28.4% and 19.5% respectively.

MIDF Research said the majority of major markets experienced declines last week with 17 out of the 20 indices it monitors recorded losses.

The research firm noted the correction pressures seen in equities markets as the recent release of economic data gave US policymakers reason to pivot towards a more hawkish stance.

"On Thursday, New York Fed President John Williams joined the ranks of US rate-setters adopting the 'no-rush' stance on rate cuts, initially put forth by the Federal Reserve (Fed) Governor Christopher Waller in February 24.

"This view has since been echoed by many colleagues, reflecting the cautious approach amidst slow and uneven progress on inflation despite the enduring strength of the US economy," said MIDF.