PETALING JAYA: Foreign funds sold RM450.9 million net of local equities on Bursa Malaysia last week, the largest weekly foreign net outflow in nine weeks.
“Offshore investors upped their ante in net selling activity last week, extending the selling streak on Bursa to the seventh week,“ MIDF Research said in its fund flow report today.
It said a measurable pace of foreign net selling was observed on Monday at a tune of RM12.6 million before international funds made a return on Tuesday after acquiring RM149.8 million net.
“We opine that the influx of foreign funds into Bursa on Tuesday was mainly attributable to the overnight policy rate cut from 3.25% to 3% by Bank Negara Malaysia to stimulate investment and domestic spending activities. The local bourse followed suit to close 0.4% higher 1,639 points on the Tuesday, the only day during the week which had a gain.”
Foreign investors were back in selling mode on Wednesday, selling off RM75.1 million net as concerns of the US-China trade tensions linger.
The level of foreign net selling swelled to RM382.5 million net on Thursday, the highest in a day so far this year. Worries escalated ahead of Friday’s deadline when the US will increase tariffs on US$200 billion (RM831.3 billion) worth of Chinese goods from 10% to 25%. The huge foreign net outflow was in conformity with other regional peers namely Thailand, Indonesia, the Philippines and Taiwan.
International funds still sold local equities on Friday but at a lower pace of RM130.5 million net with the first day trade talks between the US and China making no significant progress.
On a month-to-date basis, Malaysia has recorded a foreign net outflow of RM527.4 million in May 2019. This brings the year-to-date foreign net outflow from Malaysia to RM3.28 billion.
Participation amongst foreign investors experienced a slowdown last week. Foreign investors recorded a 4.7% weekly decline in average daily traded value last week but still remained at healthy levels of above RM1.00 billion at RM1.18 billion.
