Foreign funds reduce pace of selldown

KUALA LUMPUR: Foreign funds remained as net sellers for the seventh week running albeit at a slower pace, according to MIDF Research.

“Based on data from Bursa, foreign investors sold RM324.5mil net of local equities last week and was the lowest in comparison to the other six markets we cover (South Korea, Taiwan, Thailand, the Philippines, India and Indonesia),” the research house said in its weekly fund flow report.

MIDF said Bursa started the week on the wrong foot as foreign funds sold RM243.3mil on Monday as risk sentiment was affected by the U.S-China trade tensions reaching a fresh peak as both nations slapped new tariffs on each other’s goods.

The level of foreign net selling activity inched higher to reach RM293.6mil, the highest in three weeks. This was despite President Trump said that the U.S still wants a deal after praising comments by China’s chief negotiator on trade.

“A reprieve was seen in foreign net outflows on Wednesday as foreign investors sold at a substantially lower level of RM13.2mil.

“However, the local bourse continued to drop 0.1% to close at 1,589.8 points on the same day, the lowest close since September 2015, ” MIDF said.

Nevertheless, the research house said foreign investors returned to Malaysia on Thursday and Friday at a tune of RM48.5mil net and RM177.1mil net respectively.

“As such, the 18-day foreign net selling spree was snapped and the local stock barometer jumped 1.1% to 1,612.1 points, ” it said, adding that optimism was sparked by China’s plan to not immediately respond to the latest round of tariffs announced by the U.S effective on Sept 1.

“The month of August recorded a total foreign net outflow of RM2.60bil, the largest since June 2018 which saw foreign investors selling RM4.93bil worth of local equities, ” MIDF said.

Nevertheless, this was the second lowest monthly foreign net outflow amongst the seven markets MIDF monitors.

On a year-to-date basis, the foreign net outflow from Malaysia stands at RM7.34bil.

In terms of participation, foreign investors experienced the largest weekly increase of 52.3% in the average daily traded value (ADTV) to reach above the RM1bil mark at RM1.37bil.

Star Online