KUALA LUMPUR (Dec 17): Foreign selling of Malaysian equities of Bursa Malaysia widened to RM314.3 million last week from RM80.3 million 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In his weekly fund flow report today, MIDF Research’s Adam M Rahim said this was more than three times the amount withdrawn in the preceding week.
“Monday saw foreign funds withdrawing RM171.8 million net as disappointing China inflation and trade data sapped investor sentiment.
“Offshore investors continued selling on Tuesday to a tune of RM219.2 million net, the largest in 10 trading days, stretching the daily selling streak on Bursa to four days.
“The selloff was mainly triggered by Theresa May’s postponement of a parliamentary Brexit vote in addition [to] Japan’s GDP contracting the most over 4 years, which offset Wall Street’s overnight rally,” he said.
Nonetheless, Adam said international funds were net buyers on the next two days with Thursday recording the highest foreign net inflow since early November this year worth RM123.3 million.
He said optimism on these days was sparked by the US-China trade war thaw as China planned to cut tariffs on US-made to 15% from 40%.
He said the local bourse followed suit to record gains above 0.5% on both days.
Adam said the mood turned sombre on Friday as China’s retail sales grew at its slowest pace since 2003 while its industrial output rose the least in three years.
“As such, foreign funds pulled out RM133.1 million net of equities from Bursa on the same day.
“With two more weeks before 2018 ends, the year-to-date net outflow from Malaysia has reached RM11.1 billion or US$2.73 billion,” he said.
Adam said although this amount offsets last year’s net inflow, Malaysia is still the nation with the second lowest year-to-date outflow amongst the seven Asian markets he monitors.
“The participation rate amongst the various groups of investors saw a decline across the board.
“The average daily traded value of foreign investors registered the smallest weekly drop of 10.7% after declining below RM1 billion to RM991 million,” he said.