Offshore funds drop RM357.7mil net of Malaysian equities

KUALA LUMPUR: The exit of foreign funds continued for a second consecutive week on Bursa Malaysia to the sum of RM357.7mil net, in line with the net selling of equities across the region.

By sector, the highest net foreign outflows were recorded in financial services (RM206.9mil), consumer products and services (RM131.4mil) and construction (RM110.1mil).

The sectors that saw the highest net foreign inflows were industrial products and services (RM104.4mil), technology (RM67.6mil) and property (RM34.7mil).

While offshore funds disposed of their Malaysian equity holdings, local institutions maintained their support with a second week of net buying worth RM354.9mil.

Local retailers also maintained their net buying for a second week, valued at RM2.7mil.

According to MIDF, foreign investors were net sellers of US$579.4mil in equities in the eight Asian markets under its coverage, with the highest net outflow see in Taiwan.

Global investors remain focused on the US inflation environment, which are shaping bets on whether US policymakers will start easing interest rates this year.

"We believe the moderation in inflation will allow the Fed to begin slashing interest rates towards the final quarter of the year but if it remains elevated, there is a possibility that the Fed may opt for a higher-for-longer stance beyond 2024," said MIDF.

The Federal Open Market Committee will reconvene on July 31 to decide on their monetary policy direction.

Based on the CME FedWatchTool, there is an 89.7% probability for rates to remain unchanged and a 57.9% probability of a 25bps cut in the September meeting.