This article first appeared in The Edge Financial Daily on July 10, 2018

KUALA LUMPUR: Foreign investors continued to pare their holdings in stocks listed on Bursa Malaysia last week, for the 10th consecutive week.

According to MIDF Research, this has been the longest weekly selling streak recorded since the 20-week selling spree from May to September 2015.

In its weekly fund flow report yesterday, the research firm said based on preliminary data from Bursa which excluded off-market deals, the amount sold by foreign funds last week was little changed at RM704.3 million net compared with RM705.4 million net a week ago.

“Foreign investors were net sellers on every single day of the week. Notably, the magnitude of foreign net selling from [last] Monday to Thursday was rather contained, only from RM45 million to RM100 million.

“During this period of modest selling activity, the highest daily outflow of RM100.4 million occurred [last] Tuesday, coinciding with the FBM KLCI’s lowest closing of 1,680 points within the same period,” said MIDF Research.

“Foreign attrition later surged [last] Friday to RM393.6 million net, the highest in a day since June 21. The huge attrition was in conformity with other regional peers — South Korea and the Philippines,” it added.

MIDF Research attributed last Friday’s major sell-off to the US-China trade dispute where the US had officially implemented a 25% tariff on US$34 billion (RM137.02 billion) of Chinese goods, followed by an immediate tit-for-tat measure by the Chinese government.

“The cumulative year-to-date outflow from Malaysia as of last Friday stood at RM7.53 billion net, offsetting 75% of last year’s total foreign inflow of RM10.33 billion net,” said MIDF Research.

“Nevertheless, Malaysia still has the second-lowest outflow among the four Asean markets that we monitor after the Philippines on a year-to-date basis.”

MIDF Research also noted that foreign participation took a breather last week as foreigners retreated to the sidelines amid the intensified trade tensions.

“Foreign average daily trading value (ADTV) substantially declined 26% to below RM1 billion. The retail market, meanwhile, remained healthy although its ADTV was little changed at RM807.7 million.”

Globally, equity markets ended mixed last week as global trade tensions took centre stage.

“The foreign tide continued to leave Asia for the fourth week running. Based on the provisional aggregate data for the seven Asian exchanges that we track, investors classified as ‘foreign’ sold US$1.45 billion net last week, just around US$200 million lower compared with the amount disposed of in the preceding week,” said MIDF Research.