This article first appeared in The Edge Financial Daily on December 4, 2018

KUALA LUMPUR: Offshore investors marked their fourth straight week of selling shares on Bursa Malaysia, bringing the year-to-date (YTD) outflow to RM10.67 billion, according to MIDF Amanah Investment Bank Bhd Research.

In his weekly fund flow report yesterday, MIDF Research’s Adam M Rahim said foreign selling of Malaysian equity on Bursa Malaysia widened to RM244.5 million last week, nearly five times the RM52.3 million withdrawn in the prior week.

He said international investors entered into Bursa last Monday at a tune of RM65.2 million net — extending the foreign net buying streak from the previous week to three days — with much of the optimism coming from Wall Street’s Black Friday spending, which surged to a record in addition to the stabilisation of Brent crude oil price reaching US$60 (RM250.20) per barrel.

However, Adam said there was an exodus of foreign funds last Tuesday as international investors offloaded RM277.1 million, the largest in a day since early November this year, coinciding with the FBM KLCI’s biggest daily drop since Oct 23.

Investor sentiment was tempered last Tuesday as US President Donald Trump said he intended to expand trade tariffs on all remaining imports from China, on top of news of Genting Malaysia Bhd’s legal dispute with Walt Disney and Twenty-First Century Fox Inc.

The level of foreign net selling then shrank to RM32.7 million last Wednesday before seeing a measurable net inflow of US$84.5 million last Thursday following the speech by US Federal Reserve chairman Jerome Powell, Adam said.

Nevertheless, he said last Thursday’s foreign buying was wiped off by last Friday’s sell-off worth RM84.8 million as investors retreated to the sidelines ahead of the highly anticipated meeting between Beijing and Washington in Buenos Aires, Argentina.

Adam said the day was also marked by the rebalancing of the MSCI Indices which took place at the end last Friday.

The month of November recorded a total foreign net outflow of RM718.9 million, almost half of the RM1.42 billion offloaded in October, he said.

The resultant YTD foreign outflow of RM10.67 billion, or US$2.64 billion, however, is not as high compared with the other two Asean peers MIDF Research tracks, namely Thailand and Indonesia, which have both seen YTD outflows larger than US$3 billion.

He said the average daily traded value for foreigners stood below RM1 billion for the third week in a row, “a level deemed not active”.

Meanwhile, most equity markets worldwide ended in the black last week as investors took cue of monetary policy developments from the US while waiting for the meeting between the US and Chinese leaders, Adam noted.