This article first appeared in The Edge Financial Daily on September 26, 2017

KUALA LUMPUR: Foreign investors offloaded RM477.7 million net of Malaysian equity last week, wiping off last week’s inflow of RM345.1 million net, according to MIDF Research.

“It was the first time foreign investors sold more than RM400 million for this year, making it the largest withdrawal so far. The last time foreign selling reached such levels was back in end-December 2016,” the research firm said in its weekly fund flow report yesterday.

It added that after three consecutive weeks of foreign inflows, global investors took a breather last week as they cleared positions ahead of the long weekend.

“The weekly outflow was in conformity with those seen by Southeast Asian peers, notably Thailand and Indonesia.”

MIDF Research noted that international investors were net sellers on three out of four trading days last week.

“[Last] Wednesday recorded the highest outflow in a day since June 30, which amounted to RM221 million net. On the same day, the FBM KLCI slid 0.17% to close at 1,773 points, mainly dragged by CIMB Group Holdings Bhd which had its Japanese shareholder, Mitsubishi UFJ Financial Group, sold its entire stake through an overnight block trade,” it said.

Due to last week’s massive outflow, MIDF Research said the cumulative net inflow thus far this year into shares listed on Bursa Malaysia went below RM11 billion to RM10.6 billion. “Nonetheless, outflows have only been recorded in nine out of 38 weeks this year, which is a safe level,” it added.

Meanwhile, foreign participation rate dipped last week amid the surge in outflows, said MIDF Research.

“The foreign average daily trade value (ADTV) declined by a staggering 24% to retreat below the RM1 billion mark to settle at RM861 million.

“In contrast, retail participation remained healthy for the week. The retail ADTV increased by 7% from RM940 million to breach the RM1 billion mark for the first time in 17 weeks,” it added.

Globally, the research firm said equity markets worldwide were trading in a narrow range last week amid resurfaced tensions from the Korean Peninsula, which diverted investors’ attention from the raft of major monetary policy decisions.

“Foreign tide continued to leave Asia for the ninth consecutive week. Based on provisional aggregate data from the seven Asian exchanges that we track, investors classified as foreign offloaded US$1.3 billion (RM5.45 billion) net, more than triple the amount recorded in the week before which was US$400.2 million net,” it noted.