KUALA LUMPUR (July 2): Foreign investors disposed RM705.4 million of Malaysian equity last week, from RM1.89 billion the prior week, according to MIDF Amanah Investment Bank Bhd Research.
In his weekly fund flow report today, MIDF Research’s Adam M Rahim said while mirroring markets elsewhere in Asia, Bursa continued to experience its ninth week of foreign attrition albeit at a slower pace.
He said offshore investors were net sellers from Monday to Thursday with none of the days recording attrition above RM300 million net.
Adam said Monday had the highest net outflow during the week of RM291.4 million as the escalating trade dispute between the U.S and China stoked risk aversion.
He said despite foreign selling activity slowing down to a tune of RM206.1 million net later on Thursday, the FBM KLCI dropped further to 1,665.68 points, the lowest close since January 2017 following the slump in Wall Street overnight spurred by the comments by President Trump’s economic adviser, Larry Kudlow on the U.S’s hard line on trade in spite of President Trump’s softer stance.
Adam said the tide turned in Friday when foreign investors mopped up RM259.4 million net, snapping a 37-day long episode of foreign attrition amidst window dressing activites.
“The FBM KLCI followed suit to snap its four-day losing streak by closing 1.55% higher that day, the biggest daily gain so far in 2018.
“We note that Friday’s foreign net inflow is in conformity with other regional peers we track namely the Philippines, Thailand and Indonesia,” he said.
Adam said for the month of June, the amount of net outflows from Malaysia reached RM4.93 billion.
He said This brings the 1H18 cumulative outflow in 2018 to RM6.82 billion net, offsetting more than half of last year’s total net inflow of RM10.33 billion.
Nonetheless, he said Malaysia still has the second lowest outflow amongst the 4 ASEAN markets he monitors after the Philippines on a year-to-date basis.
“Participation levels of foreigners, retailers and local institutions experienced a weekly dip.
“Nonetheless,activity levels are still deemed healthy as the average daily trade value (ADTV) is still above RM800 million for retailers, RM2 billion for local institutions and RM1 billion for foreign investors,” he said.